With the debilitating condition of cyber security in today’s internet age, Symantec, one of world’s leading security software company, has today announced that it will acquire Arizona-based identity theft protection firm LifeLock Inc. for $2.3 billion.
Symantec has agreed to pay $24 per share for LifeLock in enterprise value and expects the deal, already approved by board members, to be finalized in the first calendar quarter of 2017. The said offer is a 16 percent premium over its closing price of $20.75 on Friday. The share prices have since then spiked about 1.2 percent to reach $21 in after-hour trading.
With this acquisition, Symantec aims to combine the security technologies of Norton and LifeLock to “deliver comprehensive cyber defense for consumers.” This amalgamation will not only add a new dimension to Symantec’s protection capabilities but enables it to expand the addressable market, broaden value proposition, and enable sustainable consumer segment revenue and profit growth.
Airing his views on the acquisition of one of the largest identity theft security firms, Symantec CEO Greg Clark says,
As we all know, consumer cybercrime has reached crisis levels. 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.
LifeLock is a leading provider of identity and fraud protection services, with over 4.4 million highly-satisfied members and growing. It was started by Todd Davis, Robert Maynard in 2015 to protect the info of its members from use by third-party vendors. Leveraging unique data, science, and patented technology, the company offers identity threat detection, proactive identity alerts, and comprehensive remediation services at membership rates as low as $10. Its services are not restricted to credit monitoring, the company operates non-credit related services as well.
Commenting on the acquisition, Hilary Schneider, CEO of LifeLock, says,
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. We are very pleased to have reached an outcome that serves the best interests of all LifeLock stakeholders.
The cyber-security giant plans to finance this acquisition with cash (most likely $1.55 billion) on the balance sheet and $750 million of new debt. Symantec’s board of directors have also increased company’s share repurchase authorization from approx. $800 mn to $1.3 bn and it is expected to authorize repurchases worth $500 mn by end of fiscal 2017. The company reportedly beat other competitors including PE firms Permira, TPG, and Evergreen Coast Capital to acquire LifeLock.