Symantec pays almost double what Blue Coat was worth last year as it attempts to improve enterprise security credibility and boost growth
Security provider Blue Coat has been bought out by Symantec for $4.65 billion (£3.3bn), as the latter vies to boost its enterprise cybersecurity credentials.
Blue Coat’s chief executive Greg Clark will be promoted to CEO of Symantec and join the company’s board of directors. Symantec’s former CEO Michael Brown left the position in April after his company scuppered its Q4 2016 sales.
Symantec had previously forecast sales of between $885 million and $915 million, but only hit $873 million (£617m).
Clark said that with acquisition Symantec customers, from large businesses down to individual customers, will get access to “unmatched” cloud security.
“I am very excited about the opportunity to join Symantec as CEO and look forward to working with the strongest, deepest team in security to realise the many strategic and financial benefits this transaction will create,” he said.
Blue Coat is best known for its networks and cloud security products, and now Symantec will be able to focus on providing security “for the cloud generation of users, data and apps, for the cloud”.
Symantec said that the purchase will create $150 million (£107m) of annual net cost synergies. Bain Capital, Blue Coat’s majority shareholder, valued the company at $2.4 billion (£1.7bn) in March 2015 when it was purchased from private equity group Thomas Bravo. Since then, Blue Coat’s net revenues have grown 17 percent year-on-year, hitting $755.4 million (£534.2m) last year.
“In addition to a proven track record of delivering scale and profitable growth, Greg brings significant leadership experience, deep security expertise and a history of successfully integrating companies into a single portfolio; he is the right person to lead Symantec as we advance our position as the leader in cybersecurity.”
In January, Symantec had to wipe almost $1 billion off the face of its sale of Veritas storage business to Carlyle Group after “uncertainties” arose about the transaction.
Private equity firm Carlyle Group is now paying $7.4 billion (£5.23bn) for Veritas, including $6.6 billion (£4.7bn) in cash, instead of the previously stated $8 billion (£5.7bn) that the two companies had agreed on last August. Symantec and Carlyle also agreed to increase the amount of offshore cash remaining in Veritas from $200 million to $400 million, which will result in a net consideration to Symantec of $7 billion (£4.95bn).