Broadcom Buys Symantec
Broadcom buys Symantec.
Broadcom buys Symantec’s enterprise security unit for $10.7 billion.
Symantec delivers cloud, web, and data security for organizations. The firm also has a consumer business, which is not part of the deal.
Hock Tan of Broadcom said: ‘M&A has played a central role in Broadcom's growth strategy and this transaction is the next logical step in our strategy following our acquisitions of Brocade and CA Technologies. Symantec's enterprise security business is recognized as an established leader in the growing enterprise security space and has developed some of the world's most powerful defense solutions that protect against today's evolving threat landscape and secure data from endpoint to cloud. We look forward to expanding our footprint of mission-critical infrastructure software within our core Global 2000 customer base.’
Daniel Schulman of Symantec said: ‘Symantec has a long history of offering unparalleled cyber technology. It's a testament to our market leadership and dedication to the mission of making the world a safer place, that Broadcom has chosen Symantec’s Enterprise Security assets to expand their reach into cybersecurity. By unlocking value from Enterprise Security, we are advancing our ongoing transformation strategy and positioning our consumer cyber safety business, Norton LifeLock, for success.’
Rick Hill of Symantec said: ‘This is a transformative transaction that should maximize immediate value to our shareholders while maintaining ownership in a pure-play consumer cyber safety business with predictability, growth, and strong consistent profitability. Also, it allows the Enterprise Security business to grow and compete on an enterprise platform with a worldwide sales and distribution reach which can service our existing customers. It also allows our Norton LifeLock business, a world-recognized leader in consumer and small business cyber safety, to run independently and give investors a clear understanding of the growth opportunity and strong financial performance.
With a large and growing market, Norton LifeLock products address consumers’ increasing need for cyber safety. In the first quarter of the fiscal year 2020, our Consumer Cyber Safety segment contributed 90% of Symantec’s total company operating income. It's our view that with an operating model focused on increased marketing investments and product development for consumer privacy, we can simultaneously grow our subscriber base and increase our annual revenue per user. We expect this asset divestiture will enable our Norton LifeLock business to grow revenue in the mid-single digits, with continued strong cash flow from operations and expanded earnings growth.
It has been my honor to work with employees from every area of the Company. I can say there are no more capable and driven people than these executives, managers, and employees. As we work toward closing this transaction with Broadcom, we stay committed to protecting our customers and continuing to focus on operational excellence.’
Vincent Pilette of Symantec added: ‘This $10.7 billion agreement to sell our Enterprise Security assets to Broadcom delivers significant value to Symantec shareholders. Also, we have identified $1.5 billion of annual run-rate expenses which we plan to cut over the next 12 months at a cash cost of $1 billion. We believe these cash costs will be materially offset by the sale of underutilized assets such as real estate. We are focused on disciplined execution, developing a cost structure that allows us to fuel growth and continue innovation in our consumer business.’
Goldman Sachs served as financial adviser to Symantec. Fenwick & West served as legal adviser.
Bank of America Merrill Lynch, Morgan Stanley, and Citigroup served as financial advisers to Broadcom. Wachtell, Lipton, Rosen & Katz served as legal adviser.
Broadcom buys Symantec’s enterprise security unit for $10.7 billion.
Symantec delivers cloud, web, and data security for organizations. The firm also has a consumer business, which is not part of the deal.
Hock Tan of Broadcom said: ‘M&A has played a central role in Broadcom's growth strategy and this transaction is the next logical step in our strategy following our acquisitions of Brocade and CA Technologies. Symantec's enterprise security business is recognized as an established leader in the growing enterprise security space and has developed some of the world's most powerful defense solutions that protect against today's evolving threat landscape and secure data from endpoint to cloud. We look forward to expanding our footprint of mission-critical infrastructure software within our core Global 2000 customer base.’
Daniel Schulman of Symantec said: ‘Symantec has a long history of offering unparalleled cyber technology. It's a testament to our market leadership and dedication to the mission of making the world a safer place, that Broadcom has chosen Symantec’s Enterprise Security assets to expand their reach into cybersecurity. By unlocking value from Enterprise Security, we are advancing our ongoing transformation strategy and positioning our consumer cyber safety business, Norton LifeLock, for success.’
Rick Hill of Symantec said: ‘This is a transformative transaction that should maximize immediate value to our shareholders while maintaining ownership in a pure-play consumer cyber safety business with predictability, growth, and strong consistent profitability. Also, it allows the Enterprise Security business to grow and compete on an enterprise platform with a worldwide sales and distribution reach which can service our existing customers. It also allows our Norton LifeLock business, a world-recognized leader in consumer and small business cyber safety, to run independently and give investors a clear understanding of the growth opportunity and strong financial performance.
With a large and growing market, Norton LifeLock products address consumers’ increasing need for cyber safety. In the first quarter of the fiscal year 2020, our Consumer Cyber Safety segment contributed 90% of Symantec’s total company operating income. It's our view that with an operating model focused on increased marketing investments and product development for consumer privacy, we can simultaneously grow our subscriber base and increase our annual revenue per user. We expect this asset divestiture will enable our Norton LifeLock business to grow revenue in the mid-single digits, with continued strong cash flow from operations and expanded earnings growth.
It has been my honor to work with employees from every area of the Company. I can say there are no more capable and driven people than these executives, managers, and employees. As we work toward closing this transaction with Broadcom, we stay committed to protecting our customers and continuing to focus on operational excellence.’
Vincent Pilette of Symantec added: ‘This $10.7 billion agreement to sell our Enterprise Security assets to Broadcom delivers significant value to Symantec shareholders. Also, we have identified $1.5 billion of annual run-rate expenses which we plan to cut over the next 12 months at a cash cost of $1 billion. We believe these cash costs will be materially offset by the sale of underutilized assets such as real estate. We are focused on disciplined execution, developing a cost structure that allows us to fuel growth and continue innovation in our consumer business.’
Goldman Sachs served as financial adviser to Symantec. Fenwick & West served as legal adviser.
Bank of America Merrill Lynch, Morgan Stanley, and Citigroup served as financial advisers to Broadcom. Wachtell, Lipton, Rosen & Katz served as legal adviser.
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