You are here

Back to top

Broadcom acquires Symantec enterprise business and brand

Broadcom is acquiring the enterprise security business of big channel player Symantec Corporation for $10.7bn in cash, after a previous attempt to buy the whole company lock, stock and barrel seems to have failed.

Speculation about a complete sale emerged over a month ago, but Broadcom has emerged with a slice of the business which is perhaps more useful to its operations that includes data centre chips and the business service systems supplied by CA Technologies, which it acquired last year.

“The addition of Symantec's enterprise security portfolio will significantly expand Broadcom's infrastructure software footprint as it continues to build one of the world's leading infrastructure technology companies,” said the firm.

Hock Tan (pictured), president and chief executive officer of Broadcom, said: "M&A has played a central role in Broadcom's growth strategy and this transaction represents the next logical step in our strategy following our acquisitions of Brocade and CA Technologies.

“Symantec's enterprise security business is recognised as an established leader in the growing enterprise security space and has developed some of the world's most powerful defence solutions that protect against today's evolving threat landscape and secure data from endpoint to cloud.”

That said, the business portion of the Symantec security software business has struggled on the growth front of late, so Broadcom has some work to do to turn it around.

“Deploying Symantec's enterprise security suite through Broadcom's channels will strengthen its differentiated portfolio license agreement (PLA) strategy of offering significant overall savings to customers, while creating a predictable, recurring revenue stream for Broadcom that will drive returns for shareholders,” Broadcom said.

The transaction is expected to drive more than $2bn of “sustainable, incremental, run-rate revenues” and around $1.3bn of pro forma EBITDA, including synergies. The transaction is expected to generate more than $1 billion of run-rate cost synergies within 12 months following completion. “Additionally, Broadcom expects to achieve double-digit cash-on-cash returns on its investment,” the vendor added.

Following the closing of the transaction, Broadcom will own and incorporate the Symantec brand name into the Broadcom portfolio, which of course will open up questions as to how the remaining consumer part of Symantec will market itself in the future.

Broadcom has also reaffirmed its fiscal year 2019 revenue guidance of $22.5bn, with $17.5bn from semiconductor solutions and $5bn from infrastructure software.