Symantec Buys Blue Coat, Names CEO
Symantec Corp. (SYMC) is buying Blue Coat Inc. for $4.65 billion in cash, and will name Blue Coat CEO Greg Clark to lead the combined security company once the deal closes. The move comes only a few weeks after Symantec announced weak earnings and a search for a new CEO.
Symantec’s buyout of Blue Coat represents a major vote of confidence from private equity backers. As part of the deal, Silver Lake plans to double its investment in the combined businesses to $1 billion; and Bain Capital, the majority shareholder in Blue Coat, will reinvest $750 million.
Symantec has continued to struggle after spinning off the Veritas storage business in 2015. In both the security and storage markets, Symantec and Veritas largely failed to capitalize on the major shift to cloud and mobile computing. Both companies have announced layoffs in recent months while promising to find new growth opportunities.
Blue Coat certainly fulfills Symantec’s growth mandate. Blue Coat claims to be the No. 1 market share leader and share gainer in Web Security. The company offers “Cloud Generation Security” to more than 15,000 customers worldwide. For Blue Coat’s fiscal year ending April 30, 2016, GAAP revenue was $598 million and non-GAAP revenue was $755 million — a 17% year-over-year growth rate.
Together, Blue Coat and Symantec will have more than 3,000 engineers.
Symantec and Blue Coat will host a conference call and webcast at 8 am ET/5 am PT today (June 13, 2016) to discuss the deal. ChannelE2E will be back soon with more coverage of this M&A deal, and the implications for channel partners.