Broadcom has agreed to acquire $ 10.7 billion of Symantec's corporate business to liquidate the world's largest cybersecurity provider.
San Jose, California-based semiconductor maker announced that the Monster acquisition will generate $ 2 billion in revenue and $ 1.3 billion in EBITDA (earnings before interest, taxes, depreciation and amortization). as well as over $ 1 billion should bring about cost synergies the following year. The Symantec name will be sold to Broadcom as part of the transaction.
"M & A has played a pivotal role in Broadcom's growth strategy and this transaction is the next logical step in our strategy following the acquisition of Brocade and CA Technologies," said Broadcom President and CEO Hock Tan in a statement. "Symantec's corporate security business is recognized as a leader in the growing enterprise security arena and has developed some of the world's most powerful defense solutions."
[Related: Broadcom Close To Deal For Symantec Enterprise Business: Report]
Rick Hill, President and CEO of Symantec, said the remaining consumer business contributes 90 percent of the company's total operating income, and the company expects to continue increasing its mid-single-digit sales for its Norton LifeLock business in the future to be able to.
"This is a transformative transaction designed to maximize immediate value for our shareholders while maintaining ownership of a pure cybersecurity business for consumers with predictability, growth and high consistent profitability," Hill's statement said. Security business is expected to grow and compete on a global-scale enterprise platform that can serve our existing customers. "
The agreement will bring $ 2.5 billion worth of Symantec's $ 1
Thursday's announcement ended more than a month of speculation about the future of the company California-based cybersecurity giants Mountain View gave media coverage in early July that Broadcom intends to buy both Symantec's enterprise and consumer products companies. However, the deal failed less than two weeks later, when Symantec clarified that an offer of less than $ 28 per share would be rejected.
Broadcom's acquisition of Symantec's enterprise business would be the second marriage between a chip manufacturer and an antivirus vendor in that decade, eight years after Intel bought its best Symantec competitor McAfee for $ 7.7 billion. Expected synergies never materialized, and Intel sold McAfee to private equity firm TPG in 2016 on a $ 4.2 billion sale.
The past 14 months have been turbulent for Symantec, culminating in the sudden resignation of the company's President and CEO, Greg Clark, in May 2019, with immediate effect. Since then, Symantec has been temporarily managed by former chairman and CEO of Novellus Systems, Richard Hill.
Clark's departure continued the exodus of executives to Symantec. President and COO Michael Fey left the company in December to take over the position of CEO of Mesosphere and EPP and CFO Nicholas Noviello, announcing plans to sell Symantec in January.
Bloomberg reported late last year that CMO Michael Williams and Brandon Rogers, senior vice president of the go-to-market team, had also left the company. Symantec declined to comment on this report.
Meanwhile, in an August 2018 filing, activist investor Starboard Value said he believes Symantec shares were undervalued at the time of purchase and that he hopes to change the makeup of the Symantec board more Release value. A month later, the company agreed with Starboard to include three new independent members on the company's board of directors.
Symantec also announced in September that it had closed its internal review on concerns raised by a former employee and had deferred $ 12 million in revenue in the quarter ended March 2018. The review identified a specific behavior that was incompatible with the company code of conduct and referred the matter to Symantec to take appropriate action.