martinwolf
Transaction Analysis
Symantec Acquires Blue Coat Systems
Financial Information
- Enterprise Value $6.30 billion
- EV/LTM Revenue 10.5x
Transaction Facts
- Symantec (NASDAQ: SYMC) announced yesterday that it has agreed to acquire enterprise security leader Blue Coat, Inc. in a transaction expected to close during Q3 2016.
- Symantec plans to finance the transaction with cash on the balance sheet and $2.8 billion of new debt. Silver Lake, which invested $500 million in Symantec in February, will invest an additional $500 million. Bain Capital, majority shareholder in Blue Coat, will reinvest $750 million in the combined company.
- Greg Clark, CEO of Blue Coat, will be appointed CEO of Symantec and join the Symantec Board upon closing of the transaction. David Humphrey, a Managing Director of Bain Capital, will also join the Symantec Board.
Making a Play for Growth
- Doubling Down: Silver Lake initially invested $500 million in Symantec earlier this year, and it is doubling this investment as part of this deal. The private equity fund is well-versed multi-part maneuvers - its double dip with Arago proved incredibly lucrative.
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 Tried and True: Symantec has been beset by disappointing financial results, with repeated revenue declines despite the increased prominence of cybersecurity as a corporate and consumer priority. Blue Coat, however, has enjoyed strong growth at 17%, and Symantec is banking on using that growth trend to transform its own momentum.
- Paying the Price: Symantec is paying a high multiple for Blue Coat, which not just boasts strong growth but also, thanks to the support of investor Bain, has also assembled a stable of cloud-related technologies through M&A. The figures paid by Symantec are in line with what Blue Coat stood to receive from an IPO, an option it was exploring earlier this year.
- Maximizing Growth Potential: Current Blue Coat CEO Greg Clark describes the two companies as having "virtually no product overlap," which, when combined with the expected $150 million in cost synergies, creates a scenario where the company can build its portfolio while cutting costs.
For more information about this transaction,
click here to read the press release.
martinwolf was not the advisor in this transaction.
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With offices in the San Francisco Bay Area, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 140 transactions in nineteen countries and sold seven divisions of Fortune 500 companies. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com. To learn more about martinwolf, contact Matthew Putzulu at [email protected]. © martinwolf 2016 |
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