Less than a month after Bain Capital announced it was taking Blue Coat public, Symantec has shelled out $4.65 billion for the company, according to The VAR Guy. That number is almost double the $2.4 billion that Bain paid for Blue Coat just last year, but on par with what analysts expected Blue Coat to receive from the abandoned IPO.
The deal holds a lot of promise for Symantec, which has seen disappointing financials recently. In both quarterly reports this year, the company reported a 2 percent decline in year over year revenue, and its stock has dropped approximately 27 percent over the last year.
In contrast, Blue Coat has reported a 17 percent growth, despite a $232 million net loss on $598 million in revenue, as reported by Fortune. Blue Coat attributes much of that loss to its active M&A activity in the year since Bain took over, namely its acquisitions of Perspecsys and Elastica. The investment group Silver Lake, which invested $500 million in Symantec earlier this year, is matching that investment in the new combined company. Similarly, Bain will reinvest $750 million of its proceeds off the deal into the new venture.
This is a big move for the cybersecurity sector, and for Symantec, in particular. The two companies have very little overlap, with Symantec’s primary focus on on-premises security and Blue Coat’s on web and cloud-based solutions. Together, they’ll be a juggernaut in enterprise security solutions. This is a sector Symantec has been trying to establish a firm foothold in as sales in its consumer business, through its Norton anti-virus line, begin to slow amid a slew of anti-virus software vendors entering the market. With the Blue Coat acquisition, 62 percent of Symantec’s revenues will come from enterprise solutions.
For an in depth take on the implications of this acquisition, check out Kris Blackmon’s entire article.