Mountain View security software firm Symantec will take on $2.8 billion in debt to buy Sunnyvale web-protection company Blue Coat for $4.65 billion, the companies announced Monday.
“The combination of Symantec and Blue Coat potentially shifts the landscape of cybersecurity based on a consolidation of two of the largest standalone players in the space,” William Blair analyst Jonathan Ho said in a note Monday. “Symantec and Blue Coat have very little product overlap. Blue Coat is the market leader in the secure web gateway and an emerging player in cloud security areas. The acquisition improves Symantec’s positioning and cross-sell and up-sell capability into its broader enterprise customer base while giving the company access to newer growth opportunities related to cloud security.”
Blue Coat CEO Greg Clark will take over as Symantec CEO. Symantec had announced in April that its CEO, Michael Brown, would be stepping down. In May, after missing fourth-quarter sales targets, the company said it would cut 1,200 jobs and shutter a quarter of its offices to cut $400 million in costs.
Blue Coat ended its last fiscal year in April with $755 million in revenue and 17 percent year-over-year growth, the news release announcing the sale said.
“With this transaction, we will have the scale, portfolio and resources necessary to usher in a new era of innovation designed to help protect large customers and individual consumers against insider threats and sophisticated cybercriminals. Together, we will be best positioned to address the ever-evolving threat landscape, the massive changes introduced by the shift to mobile and cloud, and the challenges created by regulatory and privacy concerns,” Symantec Chairman Dan Schulman said in the release.
The size of the deal highlights the “escalating priority” companies of all sizes are putting on the security of their digital assets, said Ted Harrington, executive partner at cybersecurity firm Independent Security Evaluators.
The sale is expected to close in the third calendar quarter. “The integration of the two companies will be led by executives from both Symantec and Blue Coat, with integration planning to begin immediately,” the news release said.
Photo: Symantec headquarters in Mountain View (courtesy Symantec)