OREANDA-NEWS. CA Technologies (NASDAQ: CA) announced today that it intends to increase the dividend per share in Fiscal Year 2017, subject to quarterly board approval, to $1.02 per share for the year, or $0.255 per share on a quarterly basis. This is up from the current $1.00 per share annual dividend, or $0.25 per share on a quarterly basis.    

The company has accelerated its Common Stock Repurchase Program, having agreed to repurchase 22 million shares of its Common Stock from Careal Holding AG, its largest shareholder, in a private transaction valued at $590 million (with an effective share repurchase price of $26.81 per share).

The per share purchase price represents a 3% discount to the 10-trading day volume weighted average price for CA stock using a reference date of November 5, 2015. The closing price of CA stock on November 17, 2015 was $26.90.  The transaction, which is expected to close in the third quarter of Fiscal Year 2016, will be funded from US cash on hand.

Careal Holding AG has disclosed that Martin Haefner, one of Careal’s co-principals, will obtain approximately 37 million shares of CA common stock from Careal to add to his personal investment holdings.

This deal effectively concludes CA’s prior $1 billion stock repurchase program, through which CA had repurchased approximately 11 million shares as of September 30, 2015.  As a result, as part of the company’s capital allocation strategy, CA’s board of directors has authorized a new $750 million share repurchase program.

The impact of the accelerated share repurchase is expected to benefit GAAP EPS by $0.03 and non-GAAP EPS by $0.04 in FY16. 

“Our capital allocation strategy, which includes a new $750 million share buy-back authorization as well as an increasing dividend, reflects our improved confidence in our business as we look to the coming years,” said Rich Beckert, CFO, CA Technologies.  “The transaction with Careal provided us with the opportunity to accelerate our share repurchase program at favorable prices, and highlights our long-term strategy of returning capital to shareholders.”

Careal used CA's share buyback program as an opportunity to rebalance Careal’s assets as part of an overall reallocation. Careal issued a statement today that “Careal Holding AG and its shareholders remain the principal shareholders of CA Technologies… they believe that CA Technologies will continue to grow and intend to keep hold of their investments for the long term.”