The stock price of Symantec Corporation (NASDAQ:SYMC) climbed nearly 9% to $20.87 per share during the extended trading on Thursday after the company announced a $500 million strategic investment from Silver Lake, a private equity firm focused on technology investing.
Under the terms of the investment agreement, Silver Lake is acquiring $500 million aggregate principal amount of Symantec’s 2.5% convertible senior unsecured notes due 2024 with an initial conversion price of $21 per share.
Symantec expected to complete the transaction on or about March 4, 2016. The deal is subject to customary closing conditions.
Silver Lake managing partner Ken Hao to join Symantec Board
In connection with the investment, Silver Lake managing partner, Ken Hao will join Symantec’s Board of Directors following the closing of the transaction. The Board will be have ten directors (nine are independent) with Mr. Hao’s appointment.
In a statement, Mr. Hao said, “As a premier cybersecurity provider, Symantec has the potential to solve some of the most significant challenges facing the rapidly growing market for security solutions. We look forward to partnering with Symantec to achieve its long-term strategic vision.”
On the other hand, Symantec President and CEO Michael Brown, said, Silver Lake’s investment in Symantec validates the significant progress we’ve made in our transformation and is a tremendous vote of confidence in the company.” He added, “Ken brings extensive industry knowledge and operational expertise from managing and advising leading technology businesses.”
Symantec increases capital return program to $5.5 billion
The cybersecurity company also announced its decision to increase its total capital return program to $5.5 billion, which is expected to be completed by the end of March 2017.
Symantec already completed a $500 million accelerated shares buyback in January this year. The company intends to repurchase $2.3 worth of future shares and to distribute a special dividend of $4.00 per share worth $2.7 billion.
According to the company, the special dividend will be payable on March 22, 2016 to shareholders on record as of the close of business in March 8, 2016. The special dividend will be in addition to its quarterly dividend.
The company also decided to adjust its annual dividend to $0.30 per share or $0.075 per share every quarter starting in the first quarter of 2017. The adjustment will reflect its reduced projected domestic cash flow after the sale of Veritas, and the one-time special dividend.