Symantec to buy cybersecurity firm Blue Coat for US$4.65b

[CHICAGO] Symantec Corp is preparing to acquire Blue Coat Systems Inc for US$4.65 billion in cash, a deal that will beef up its cyberdefense technology and fill its vacant chief executive officer position.

Blue Coat CEO Greg Clark will take the helm of the combined company and join its board after the deal closes in the third quarter, both companies said in a statement. The transaction should help Symantec realise another US$150 million in annual net cost savings, on top of an expected US$400 million yearly expense reduction it had previously announced, they said.

Symantec said in April that CEO Michael Brown will step down, as the company reduced its sales and earnings forecasts. The Mountain View, California-based company is in the midst of a major transition as it tries to recapture momentum in the fast-growing cybersecurity market.

Mr Brown had overseen a large-scale reorganisation, led by his January sale of Symantec's Veritas data-storage division for US$7.4 billion to the Carlyle Group LP.

"With this transaction, we will have the scale, portfolio and resources necessary to usher in a new era of innovation designed to help protect large customers and individual consumers against insider threats and sophisticated cybercriminals," Dan Schulman, chairman of Symantec, said in the statement.

As part of the deal, Bain Capital LLC, which controls Blue Coat, will put US$750 million of its proceeds from the sale into the combined company. Private equity firm Silver Lake will double its investment to US$1 billion. The Wall Street Journal first reported on the acquisition Sunday.

BLOOMBERG