Symantec Buys Blue Coat for $4.65B To Create Cybersecurity Giant
Security company Symantec is spending $4.65 billion to acquire Web and cloud security firm Blue Coat, creating a cybersecurity behemoth for the enterprise market. Combined, the companies will generate around $4.4 billion in revenues this fiscal year, more than 60 percent of which is expected to come from enterprise security.
For Symantec, the acquisition helps boost its capabilities in both Web and cloud security, complementing the company’s existing services, which are primarily focused on onsite security.
For Blue Coat, on the other hand, the sale represents a major coup for a company that was expected to be taken public by its majority shareholder, Bain Capital. Blue Coat CEO Greg Clark will take over as CEO of the combined companies.
Threat Telemetry and Cloud Security
The transaction represents the second time Blue Coat has been acquired in as many years, with Bain spending $2.4 billion to buy the security company in 2015. Since then, the private equity firm has acquired several smaller companies, such as Perspecsys and Elastica, to help bulk up Blue Coast prior to the planned IPO. But Symantec’s offer has apparently upended those plans, despite the fact that paperwork was publicly filed with regulators only two weeks ago.
Symantec said the deal will help it better protect enterprise customers against more cyber threats, with protection, detection, and remediation capabilities available across endpoint, e-mail, Web, network, and servers.
“This transaction will combine Symantec’s leading threat telemetry with Blue Coat’s networks and cloud security offerings to provide differentiated security solutions across hundreds of millions of endpoints and servers, and billions of email and web transactions,” Symantec said in a statement.
Blue Coat will also help Symantec enhance its enterprise cloud security services as Blue Coat’s data loss prevention capabilities will be applied at the Web proxy and to over 12,000 cloud applications. The deal will also create a major player in cyber research and development and threat research with over 3,000 engineers and researchers, as well as nine Threat Response Centers.
“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 Dan Schulman, chairman of Symantec. “Together, we will be best positioned to address the ever-evolving threat landscape, the massive changes introduced by the shift to mobile and cloud, and the challenges created by regulatory and privacy concerns
The new entity will also benefit from some serious capital investment from Bain, which will remain a Symantec shareholder, and Silver Lake, which invested $500 million in Symantec earlier this year. Silver Lake said it plans to contribute an additional $500 million in the new company, while Bain plans to invest another $750 million. Those investments should help ensure that Symantec has more than enough resources to expand its security capabilities.