In a move broaden its portfolio, security solutions provider Symantec has entered into a $2.3 billion worth deal to acquire LifeLock, a US-based company specializing in proactive identity theft protection services for consumers and consumer risk management services for enterprises for. The combination will reportedly create the world’s largest consumer digital safety platform based on last fiscal year revenues for both companies.
The deal values LifeLock at $24 a share and was approved by the boards of directors of both companies. It is expected to close in the first calendar quarter of 2017, subject to customary closing conditions including LifeLock stockholder approval.
“As we all know, consumer cybercrime has reached crisis levels. LifeLock is a leading provider of identity and fraud protection services, with over 4.4 million highly-satisfied members and growing,” said Greg Clark, CEO, Symantec.
“With the combination of Norton and LifeLock, we will be able to deliver comprehensive cyber defense for consumers. This acquisition marks the transformation of the consumer security industry from malware protection to the broader category of Digital Safety for consumers,” Clark added.
A stride to combat growing cybersecurity threats
This move comes at a time when one third of American citizens and over 650 million people globally were the victims of cybercrime last year. Consequently, more and more consumers are concerned about digital safety, an estimated $10 billion market growing in the high single digits. In the United States alone, Symantec has estimated the total addressable market as 80 million people.
“People’s identity and data are prime targets of cybercrime. The security industry must step up and defend through innovation and vigilance. With the acquisition of LifeLock, Symantec adds a new dimension to its protection capabilities to address the expanding needs of the consumer marketplace,” said Dan Schulman, Chairman of the Board, Symantec.
Symantec has also revealed interest to integrate LifeLock with its existing Norton antivirus businesses into a single product line after the acquisition closes.
Hence, it is evident that the cybersecurity company is breaking out beyond its traditional strength in antivirus software, aiming to offer each of the company’s respective customer bases a broader digital safety solution. With this, Symantec expects to achieve additional revenue upside through higher ASPs and improved retention rates.
“After a thorough review of a broad range of alternatives, our board of directors unanimously concluded that Symantec is the ideal strategic partner for LifeLock and offers our shareholders a significant premium for their investment, at closing,” said Hilary Schneider, CEO, LifeLock.
“Together with Symantec we can deploy enhanced technology and analytics to provide our customers with unparalleled information and identity protection services. We are very pleased to have reached an outcome that serves the best interests of all LifeLock stakeholders,” he noted.
Symantec expects to finance the transaction with cash on the balance sheet and $750 million of new debt. Given the expected closing in the first calendar quarter of 2017, Symantec claims that the transaction will have no impact to its quarter ending December 30, 2016.