Symantec is buying the identity theft protection services company LifeLock for $2.3 Billion in cash. This buyout will boost the company's Norton antivirus software business to a large extent.
Symantec Corp (SYMC), the maker of Norton antivirus solution, is set to acquire LifeLock Inc (LOCK), an Arizona-based identity theft protection services company for $2.3 billion. Symantec was able to oust other bidders such as Permira, TPG, and Evergreen Coast Capital among others to win the bid to acquire LifeLock, reports Bloomberg.
The purchase of LifeLock will include taking over the company’s debts, and it is geared towards increasing the market share of Norton antivirus software among other Symantec products.
Following the avalanche of bids for LifeLock, the company’s stocks rose by 16% on Friday and now valued at $24 per share.
Since consumers globally now incline toward mobile devices than personal computers, the sales of Symantec’s Norton antivirus software has declined in recent years, and this is making the company to seek out more ways to expand its business while adding value to users, according to Reuters. The reason for this is because Norton Antivirus is largely bundled with Windows PCs.
To this extent, Symantec bought Blue Coat Inc. earlier this year for $4.65 billion and also sold off Veritas, a data storage unit to Carlyle Group for $7.4 billion. With the potential acquisition of LifeLock, the revenue of Symantec is expected to rise by about $660 million to help reposition the company alright again.
“With the combination of Norton and LifeLock, we will be able to deliver comprehensive cyber defense for consumers,” said Symantec Chief Executive Officer Greg Clark in the statement. This acquisition move will diversify the company’s business from malware protection to online safety for almost everyone.
Inside sources revealed LifeLock had been collaborating with Goldman Sachs Group for many months to ensure the sale of the company goes smoothly. The company had been involved in the business of identity theft, online security alerts, and credit monitoring among others.
Almost everyone of importance within Symantec believes the company had made the right business moves with LifeLock, including Fran Rosch, executive vice president for Norton Business Unit. “We had to extend our value proposition,” he had said, and the acquisition of LifeLock was instrumental to this repositioning.
Symantec has come a long way in the antivirus and online security business, and it is set to spend a fistful of cash on the balance sheet of up to $750 million to offset LifeLock debts. Citigroup and JPMorgan Chase are advising Symantec on the deal.