Notice: Trying to access array offset on value of type null in /home/midday/public_html/wp-content/plugins/really-simple-facebook-twitter-share-buttons/really-simple-facebook-twitter-share-buttons.php on line 318
Following the surfacing of certain uncertainties regarding the company’s acquisition by Carlyle Group LP, Veritas’ selling price was cut by $1 billion by Symantec. Hopefully, for both parties included in this trade agreement, this decrease will make the deal proceed without further hindrances.
Symantec, an antivirus and cyber security firm, decided to sell Veritas as an effect of the newly formed business focus within the company. The deal itself was originally priced at $8.5 billion, with Veritas being sold to Carlyle Group, a global asset management firm. After the deal would have been completed, an estimated $6.7 billion would have been added to Symantec’s total market value, while the rest of the sum would have been sent towards the company’s investor share buyback program.
But due to the price cut, only $5.4 billion will go towards Symantec while Veritas’ offshore cash funds will be boosted by 200%, reaching $400 million. After the deal will be complete, Symantec will hold $400 million in Veritas equity interests. The deal is expected to finalize near the end of this month on the 29th.
These uncertainties, even though they have not been disclosed by either of the two parties involved in the deal, are believed to stem from a severe fluctuation in the financial market. This event effectively led to the failed sale of a debt package, which was meant to be used in order to back the deal, of around $5.6 billion.
After the deal will complete, Symantec believes that its earnings will get significantly boosted. Because of this, the company issued an update for its Q3 2016 results, with estimated earnings being marked at around $905 million, well above the previous guidance’s midpoint released on the 5th of November.
This guidance does exclude Veritas’ information management business. Due to this fact, the parent company of Veritas will file a Form 8-K with the Securities and Exchange Commission in regards to the preliminary operating results of the sold company for the end of the final quarter, on the 1st of January this year.
Although Veritas’ selling price was cut by $1 billion by Symantec, the sum gained at the end of this still will more than likely help the cyber security company hold its position in the top leaderboards of this side of the market. But this price cut does point out that the fluctuation of the current financial market is creating a difficult environment for most companies. Similar events like the aforementioned one may start appearing more and more if the market doesn’t manage to stabilize itself in the following months of 2016.