(Adds quotes from CEO interview)
By Liana B. Baker and Greg Roumeliotis
Nov 20 Symantec Corp said it would
acquire U.S. identity theft protection services company LifeLock
Inc for $2.3 billion, in a deal that it hopes will prop
up sales at its Norton cybersecurity unit.
Symantec's security software often comes bundled with
personal computers. As a result, the company has suffered as
consumers use mobile devices more than traditional computers.
While 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 said in an interview.
Reuters was first to report earlier on Sunday that Symantec
was in the lead to acquire LifeLock.
Symantec's purchase of LifeLock is in line with its efforts
to diversify its offerings. In August, it bought Blue Coat Inc,
which helps firms maintain security over the internet, in a
$4.65 billion deal. Clark previously held the top job at Blue
Coat, and made the switch after the deal closed.
Based in Tempe, Arizona, LifeLock offers services such as
monitoring new account openings and credit-related applications
in order to alert consumers about unauthorized use of their
identity. It also works with government agencies, merchants and
creditors to remediate the impact of identity theft.
Fran Rosch, executive vice president of Norton Business
Unit, said that Symantec had dabbled 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, California-based company has been moving
away from what is sees as more commoditized services, selling
its data storage business Veritas in January to private equity
firm Carlyle Group LP for $7.4 billion.
Technology-focused firm Silver Lake Partners has also made a $1
billion investment in the company in two parts this year.
Symantec said the LifeLock deal is not expected to have a
material impact 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 explore its options.
Symantec was advised by Citigroup and JP Morgan
, along with Bank of America, Barclays Plc
, and Wells Fargo. LifeLock was advised by
(Reporting by Liana B. Baker, Greg Roumeliotis in New York and
Sangameswaran S in Bengaluru; Editing by Sandra Maler, Alan
Crosby and Himani Sarkar)