Symantec Corporation (NASDAQ: SYMC) has acquired the web security company Blue Coat for $4.65 billion, to guarantee itself a place in the future of cybersecurity. The deal was approved on Sunday by the companies’ boards of directors. Symantec shares went up 4.45% on Monday morning.
Blue Coat obtained a revenue of $598 million during the last fiscal year ending on April 30. Greg Clark, Chief Executive Officer of Blue Coat, will join the Symantec Board within the third quarter of the year after the transaction closes.
The Mountain View-headquartered Symantec is planning to gain a leading role in the cybersecurity industry. With its new acquisition, it seeks to offer new security services to protect emails, web, network and servers managed by customers.
The company also plans to expand its services in the segment of cloud security and unite investments of both companies in cyber research and development. More than 3,000 engineers will be working on that task in nine Threat Response Centers.
Symantec wants to protect customers against ‘insider threats and sophisticated cybercriminals’
Chairman of Symantec Dan Schulman, remarked that the new $4.65 billion deal will equip the company with resources needed to protect massive amounts of customers against “sophisticated cybercriminals.”
“Together, we will be best positioned to address the ever-evolving threat landscape, the massive changes introduced by the shift to mobile and cloud, and the challenges created by regulatory and privacy concerns,” added Schulman in a press release issued Sunday.
Greg Clark will join Symantec as the new company CEO. He said that the joint seeks to empower both companies in the segment of cloud security. Symantec would be an Intel’s competitor since the latter has also invested billions in cloud security for the Internet of Things.
Interesting morning of acquisition announcements: Microsoft>LinkedIn, Symantec>Bluecoat, VMware>Arkin.
— Andre Leibovici (@andreleibovici) June 13, 2016
After selling a data storage unit for $7.4 billion, Symantec wants to focus its business on security software
Symantec is the company behind Norton, an award-winning antivirus. The company has been changing its strategies since last year. Now, it is only focused on the segment of security software. In January, it sold a data storage unit called Veritas, for $7.4 billion.
62 percent of Symantec’s revenue would come from enterprise security, after acquiring Blue Coat. Reuters analysts suggest that the company is planning to compete with companies such as FireEye Inc., Palo Alto Networks Inc., and Check Point Software Technologies Ltd.
Mr. Greg Clark remarked that Symantec would be “really fit and really competitive,” under his management. The company would now receive $150 million in expected annual net cost synergies and $400 million in planned net cost savings, said Thomas Seifert, Chief Financial Officer of Symantec.
Greg Clark CEO of @BlueCoat to lead @Symantec following close https://t.co/koKCGXKrKT pic.twitter.com/0StGRrLZFL
— Symantec (@symantec) June 13, 2016
Symantec’s former CEO, Michael Brown, abandoned the company in April after it announced falling sales. Bain and Silver Lake will invest $750 million and $500 million respectively in convertible notes.
Managing Director of Bain Capital David Humphrey will also join the Symantec board, with interests in working in the segment of cloud computing, the Internet of Things and cloud services.
“The co-investment of two savvy financial sponsors are just proof of that industrial logic that is behind the combination,” Seifert was quoted as saying by the Financial Times.
SYMC + Blue Coat = transformational combination delivering comprehensive cyber defense https://t.co/koKCGXsQTl pic.twitter.com/27yGJugln0
— Symantec (@symantec) June 13, 2016
Source: Symantec Press Release