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Symantec today announced that they have entered into a definitive agreement to acquire Blue Coat for approximately $4.65bn in cash.
The deal, which is expected to close in the third calendar quarter of 2016, subject to regulatory approval, will see Blue Coat’s CEO Greg Clark step into the same position at Symantec following the resignation of Mike Brown in April.
Blue Coat’s strong web security portfolio has attracted more than 15,000 customers worldwide and the company is growing fast. For the fiscal year ending April 30, 2016, GAAP revenue was $598m with 17% year-over-year growth.
“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,” said said Dan Schulman, chairman of Symantec.
“Greg and the entire Blue Coat leadership team have done an exceptional job of strengthening, growing and scaling their business. 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,” he added.
On a non-GAAP basis, the combined company would have had $4.4bn in revenues in fiscal year 2016, with 62% of sales coming from enterprise security.
Blue Coat, which was taken private six years ago, had been testing the waters for an initial public offering and it was widely expected that the company would go public sooner rather than later. The company was acquired by private-equity firm Thoma Bravo and was later sold to Bain Capital.
Greg Clark, chief executive of Blue Coat, said, “Once combined, we will offer customers around the world – from large enterprises and governments to individual consumers – unrivalled threat protection and unmatched cloud security.
“With employees of Blue Coat and Symantec coming together, we will be well positioned to drive meaningful growth and push the boundaries of innovation. 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.”
Symantec intends to fund the deal with cash and $2.8bn of new debt. The company said that it would focus on paying down a significant portion of this debt within the next several years.
Symantec's share price has jumped nearly 5% in trading today.