Security giant Symantec has announced a $2.3 billion takeover of Arizona-based LifeLock in a move it says will create the world's largest consumer security business.
LifeLock develops a range of identity and fraud protection services and is addressing a digital safety market currently worth about $10 billion annually, according to Symantec, and growing "in the high single digits."
The move appears to reflect a new strategic focus on cybersecurity by Symantec Corp. (Nasdaq: SYMC), which is best known as the developer of the Norton antivirus software.
"This acquisition marks the transformation of the consumer security industry from malware protection to the broader category of digital safety for consumers," said Greg Clark, Symantec's CEO, in a statement.
Earlier in 2016, Symantec acquired a cloud security specialist called Blue Coat Systems Inc. (Nasdaq: BCSI) in a $4.65 billion transaction and it has also this year raised about $7.4 billion from the sale of Veritas, which develops back-up and recovery software. (See Symantec Buys Blue Coat in $4.65B Deal.)
The takeover of LifeLock will be funded through cash on the balance sheet as well as $750 million in new debt, with the fee representing a 16% premium to LifeLock's closing share price on Friday last week.
Symantec reckons its new-look consumer business following the LifeLock takeover will generate about $2.3 billion in annual revenues.
One goal is to expand the range of security offerings provided to each company's subscriber base. "Symantec expects to achieve additional revenue upside through higher ASPs and improved retention rates," said the company in it statement.
Symantec expects to close the transaction in the first calendar quarter of 2017 but does not think it will be accretive to earnings until 2019.
— Iain Morris, , News Editor, Light Reading