Symantec to acquire cyber-security firm Blue Coat

MOUNTAIN VIEW (California) — Symantec is preparing to acquire Blue Coat Systems for about US$4.65 billion (S$6.32 billion) in cash — a deal which will add to its cyber-defence technology and fill a high-turnover CEO position.

Blue Coat CEO Greg Clark will take the helm of the combined corporation and join its board after the deal closes in the third quarter, said both companies in a statement. Mr Clark will become Symantec’s fourth CEO in as many years, fulfilling its search for a leader with experience running a cybersecurity company and providing what investors hope will be much-needed stability. He replaces Mr Michael Brown, who had overseen the January sale of Symantec’s Veritas data-storage division for US$7.4 billion to the Carlyle Group.

The Mountain View, California-based company is in the midst of a major transition as it tries to recapture its momentum in the fast-growing cybersecurity market. The world’s largest developer of security software —which reduced its sales and earnings forecasts in April — is trying to re-invent itself for an industry that is now vastly different from the antivirus software arena it helped pioneer.

“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 cyber-criminals,” said Mr Dan Schulman, chairman of Symantec, in the statement.

Mr Clark will assume leadership of a company that has fallen behind Palo Alto Networks, FireEye and other younger rivals in developing technologies to detect more advanced threats. Blue Coat brings a suite of products that can make Symantec more competitive in areas such as protecting customers’ data in the cloud, performing digital forensics in the hunt for hackers and managing encrypted network traffic.

Symantec had been in advanced talks to acquire FireEye earlier this year, according to a person familiar with the matter. But discussions broke down over Symantec’s concerns about FireEye’s future growth potential, the person said, declining to be identified because the discussions were private.

Talks with Blue Coat then accelerated. The Blue Coat transaction should help Symantec realise another US$150 million in annual net cost savings, on top of a previously announced US$400 million yearly reduction in expenses. BLOOMBERG