LifeLocks’s Acquisition To Expand Symantec’s Footprint In Consumer Security Market

November 22nd, 2016 by Trefis Team
SYMC: Symantec Corp logo
SYMC
Symantec Corp

Just after four months of completing the Blue Coat acquisition, software security giant Symantec (NYSE:SYMC) has announced its decision to acquire Arizona based identity theft protection leader, LifeLock.

Here are the highlights of the acquisition

  • The deal has been valued at $2.3 Billion dollars paying $24 per share to LifeLock’s shareholders.
  • Symantec is expected to fund this deal with $750 million of new debt along with the cash on its balance sheet.
  • The acquisition is expected to be completed in calendar Q1 2017.
  • Symantec has kept its FY’17 & ’18 guidance unchanged as of yet.

Symantec received $7.4 billion dollars after Veritas’ sale in 2015. So far it has spent $4.65 billion on Blue Coat acquisition (See: Symantec Acquires Blue Coat: A $4.65 Billion Bet on Cloud Computing and Blue Coat’s CEO) and plans to spend another $2.3 billion on LifeLock, which amounts to nearly $7 billion worth of acquisitions. This is signaling that Symantec intends to replace its portfolio with faster growing segments of cloud security (23% growth forecast) and digital security (9% growth forecast) to get its revenue growth back on track. Symantec’s total revenues have declined at CAGR of 6.4% since FY’14.

Relevant Articles
  1. Earnings Beat In The Cards For Honeywell?
  2. Higher Keytruda Sales To Drive Merck’s Q1?
  3. Is Procter & Gamble Stock Appropriately Priced At $160?
  4. Should You Pick Intuitive Surgical Stock At $370?
  5. China In Focus As Apple Reports Q2 Results
  6. Here’s What To Expect From Corning’s Q1

See our complete analysis for Symantec

How This Acquisition Will Benefit Symantec?

  • LifeLock is a leader in the $10 billion digital safety market which is expected to grow to over $14 billion by 2020, according to a report by Markets and Markets.
  • The synergies of LifeLock will be realized in the consumer security division of Symantec. This will be another step by Symantec to heal its declining consumer business revenues. According to Trefis estimates, Symantec’s share in consumer security market has declined from over 70% in 2012 to about 35% in 2015 because of declining PC sales and increasing competition from smaller players. After this acquisition, the company expects the division’s growth to return to mid-single digits, with non-GAAP operating margins of 40%.
  • LifeLock has 4.4 million customers which will be an addition to the huge Norton customer base of 50 million users. Symantec will become the largest consumer security company after this acquisition with combined consumer business revenues of around $2.2 billion.
  • Both the companies will have the opportunity of cross selling as there is no overlap in their product portfolio.
  • Identity protection market doesn’t have large competitors like that in traditional software security market, where big players like McAfee, Symantec and Trend Micro are competing in similar domain. This can help Symantec to get a kick-start and establish a strong base in this market. The primary competitors of LifeLock are CSID, IdentityForce and Identity Guard, but the products of LifeLock have been rated better than its competitors on many tech review websites.

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology