In its second blockbuster deal in less than a year, Symantec unveiled plans to acquire LifeLock for $2.3 billion.
The buy primarily expands Symantec’s consumer business, adding identity protection and remediation services.
“People’s identity and data are prime targets of cybercrime. The security industry must step up and defend through innovation and vigilance,” Dan Schulman, Symantec’s chairman of the board, said in a statement. “With the acquisition of LifeLock, Symantec adds a new dimension to its protection capabilities to address the expanding needs of the consumer marketplace.”
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The deal is expected to close in the first calendar quarter of 2017, at which time the combined company would be the largest consumer security business.
The acquisition news comes after a week of rumors that Symantec was looking to buy the company, following a Bloomberg report that said LifeLock was being eyed by Symantec, buyout group Permira or private equity group TPD, which in the process of closing a deal on competitor Intel Security.
Elliott Management owns an 11 percent stake in LifeLock. Elliott Management also reportedly has a large stake in Symantec.
While the deal focuses on building Symantec’s consumer business, Jane Wright, principal analyst at Technology Business Research, said it could provide some ancillary benefits to the company’s enterprise security business. Wright said the consumer business provides the bulk of Symantec’s operating profits, money it then uses to funnel investments into its less profitable enterprise division.
“I think it’s a really good idea. … Symantec probably looked at this [acquisition] and said it will give us our funding for the new things we want to do in the enterprise and with Blue Coat,” Wright said, referring to Symantec’s $4.65 billion blockbuster acquisition of Blue Coat Systems, which closed in August. “I fully expected them to have to do something to keep the consumer side of the business going. This is a strong advance in this idea.”
From a product perspective, Wright said the acquisition helps Symantec expand its Norton security line beyond just products, as antivirus and other transactional security products become commoditized. Wright said she also believes the LifeLock products could extend into the enterprise side of the portfolio down the road, particularly around Internet of Things security.