Symantec to buy Blue Coat for $ 4.7 b to boost enterprise unit

Tuesday, 14 June 2016 00:02 - - {{hitsCtrl.values.hits}}

Reuters: Technology security firm Symantec Corp said it would buy privately held cyber security company Blue Coat for $4.65 billion in a cash deal that will ramp up Symantec’s enterprise security business.

Blue Coat helps protects companies’ web gateways from cyber attacks, a service that will complement Symantec’s existing offerings for large corporations such as email and endpoint security, Symantec executives said in an interview on Sunday.

“Blue Coat brings capabilities from the web and for network-born threats, which combined with what we already offer will provide better protection for our customers,” said Ajei Gopal, Symantec’s interim president and chief operating officer.

Symantec, which makes the Norton antivirus software, has been undergoing a transformation over the past year. It sold its data storage unit, Veritas, for $7.4 billion to a group led by Carlyle Group LP in January to gain the cash necessary turn around its core security software business.

Chief Financial Officer Thomas Seifert said Symantec had been eyeing Blue Coat for a while and wanted to wait to have the separation of the Veritas unit behind the company before it made a move to buy it. He said the deal, which is expected to close in the third quarter, would be accretive immediately.

By buying Blue Coat, 62% of Symantec’s revenue will now come from enterprise security, and it will be better positioned to compete with security players such as Palo Alto Networks Inc, FireEye Inc and Check Point Software Technologies Ltd. Symantec will now have $4.4 billion in combined revenue.

While it is shifting to focus more on enterprise security, Symantec has no immediate plans to sell its consumer unit, Seifert, the CFO said, adding that it is a highly profitable part of the company.

By buying Blue Coat, Symantec also solves a leadership issue, with Blue Coat CEO Greg Clark becoming Symantec’s CEO. Symantec’s previous CEO, Michael Brown, left in April after the company reported disappointing quarterly results.

Technology-focused private-equity firm Silver Lake Partners also agreed to invest $500 million in convertible notes of Symantec, which doubles its investment in Symantec to $1 billion.