Symantec Corp (SYMC.O) announced it would acquire LifeLock Inc (LOCK.N) $2.3 billion. It is a U.S. identity theft protection services company. Symantec hopes the deal will prop up sales at its Norton cyber security unit.
Symantec’s security software is usually offered for personal computers. As consumers use mobile devices more than traditional computers so it was going in loss. Though Norton remains profitable, its sales have been falling.
“(Norton) had been declining with the declines in PC market share. This acquisition brings $660 million in revenue to the consumer business and returns it to longer sustainable growth,” Symantec Chief Executive Greg Clark explained in an interview.
Reuters was the first person who broke the news on Sunday that Symantec was trying to acquire LifeLock.
Symantec’s purchase of LifeLock is because of its efforts to diversify its offerings. In August, it acquired Blue Coat Inc, which helps firms in maintaining security over the internet.
Lifelock was based in Tempe, Arizona. It offers services such as credit-related applications and monitoring new account openings. It was for the sake of alerting consumers about the illegal use of their identity and personal data. Moreover, it remediates the impact of identity theft. It also works with government agencies, merchant’s and creditors.
Fran Rosch, executive vice president of Norton Business Unit, said that Symantec performed good in identity security but had nowhere near Lifelock’s 4.4 million members.
“We had to extend our value proposition. It was a no-brainer for us to get back to growth,” Rosch said.
Symantec expects to finance the transaction with cash on balance sheet and $750 million of new debt.
The Mountain View, the California-based company has been extending its line selling its data storage business Veritas in January to private equity firm Carlyle Group LP (CG.O) for $7.4 billion. Technology-focused firm Silver Lake Partners has also made a $1 billion investment in the company in two parts till the end of this year.
Symantec said the LifeLock deal is not supposed to have a monetary effect on its financial results next year, and reaffirmed its fiscal year 2017 and 2018 guidance. The deal also represents a victory for activist hedge fund Elliott Management Corp, which had pushed LifeLock to seek out better options.
Citigroup (C.N) and JP Morgan (JPM.N), was advising Symantec along with Bank of America (BAC.N), Barclays Plc (BARC.L), and Wells Fargo (WFC.N). On the other hand,Goldman Sachs (GS.N) was guiding LifeLock.