{"id":97784,"date":"2019-08-08T21:31:34","date_gmt":"2019-08-09T01:31:34","guid":{"rendered":"https:\/\/rbach.net\/?p=97784"},"modified":"2021-06-28T07:28:44","modified_gmt":"2021-06-28T11:28:44","slug":"symantec-sold","status":"publish","type":"post","link":"https:\/\/rbach.net\/index.php\/symantec-sold\/","title":{"rendered":"Symantec Sold"},"content":{"rendered":"

Updated 01\/08\/2020<\/strong> – Broadcom is selling of<\/strong>f parts Symantec less than 2 months after closing the deal. Reports<\/a> have consulting giant Accentur<\/strong>e<\/a> buying Symantec\u2019s Cyber Security Services<\/a><\/strong> unit for an undisclosed amount.<\/p>\n

Under the deal, Accenture will take over Symantec’s global network of six security operations centers<\/strong> located in the U.S., the U.K., India, Australia, Singapore, and Japan. The SOC’s provide threat monitoring, analysis, and incident response services<\/strong>.\u00a0Accenture says it will use the Symantec business unit to boost its managed security services.<\/strong><\/p>\n

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Updated 09\/17\/2019 – <\/strong>As predicted below, Symantec has started slashing jobs. According to reports<\/a>, up to 230 Symantec employees will be terminated on October 15, 2019.<\/p>\n

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\"Symantec<\/a>I could have saved<\/strong> a bunch of people a bunch of money<\/strong>– IF you had read this post – you would already have a doubt about this deal – before professional prognosticators Forester<\/a> said the same thing on August 9th. In their report<\/a> analyzing the deal, the market researcher cited\u00a0Intel’s 2010 acquisition of McAfee<\/a><\/strong> and subsequent $3 billion loss spinning the security company to private equity in 2016. They said the deal should serve as a warning to CISO’s about the future of Symantec’s product portfolio under Broadcom. Well NO DUH<\/strong><\/p>\n

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Broadcom<\/strong><\/a> (AVGO<\/a>) has acquired Symantec<\/a><\/strong>‘s (SYMC<\/a>) enterprise security business<\/strong> for $10.7 billion<\/span> in cash. The two firms consummated their hot-and-cold<\/a> bromance<\/del> M&A discussions in writing<\/a> today (08\/08\/2018).<\/p>\n

\"Symantec<\/a>The deal is expected to bring in over $2 billion in annual revenue<\/strong><\/a> for the San Jose, CA-base firm. Broadcom intends to fund the transaction with proceeds from new committed debt financing. The transaction is expected to close in Q1 of Broadcom’s fiscal year 2020.<\/p>\n

Broadcom, historically a semiconductor business has been on an M&A tear in the past few years, buying its way into a broader market position<\/strong>. First, with the 2016 – $5.9 billion purchase<\/a> of network equipment vendor Brocade<\/a><\/strong>. Next was the 2018 – $18.9 billion acquisition<\/a> of CA Technologies<\/strong><\/a>. Followed by today’s $10.7 billion pick-up of Symantec.<\/span> In the presser Broadcom CEO Hock Tan called the Symantec purchase, “... the next logical step in our strategy … expanding our footprint of mission-critical infrastructure software within our core Global 2000 customer base.<\/em>”<\/p>\n

\"Broadcom<\/a>Rumors of the purchase first appeared in the press on July 03, 2019, with “advanced talks” happening on July 15th for purchase all of Symantec for $22 Billion, but by July 15, Symantec had reportedly walked away<\/strong> from the table. Reports<\/a> (which appear to be true<\/em>) at the time were that Broadcom was after just the enterprise-cybersecurity software business; leaving the consumer the business as an independent company or a spin-off to somebody else.<\/p>\n

ChannelE2E<\/a><\/em> says<\/a> the potential deal makes sense on paper. Broadcom<\/strong> is known for acquiring struggling<\/strong> or slow-growth enterprise technology businesses, stripping out costs and boosting profitability<\/strong>. They explain that Broadcom\u2019s secret to M&A success is clearly communicating staff reduction plans to acquired businesses, investors, and associated end customers. Broadcom is known for swift M&A staff cuts that include reasonable severance packages for employees \u2014 rather than long, drawn-out, torturous headcount reductions.<\/p>\n

\"\"ChannelE2E<\/em> also correctly predicted the Symantec team could face job cuts, layoffs, or potential business spin-offs as a result of the deal. Right on queue, Symantec announced<\/a> layoffs of roughly 7%<\/strong> of its more than 11,000 employees<\/a> during FY 2020. The company also plans to downsize, vacate or close certain facilities and data centers in connection with the restructuring plan.<\/p>\n

The\u00a0Symantec name<\/a> will be sold to Broadcom as part of the transaction. Interim Symantec CEO<\/strong> Rick Hill said the remaining consumer business contributed 90% of the company’s total operating income, and the company expects to be able to continue to grow revenue for its Norton LifeLock business in the mid-single digits going forward. CEO Hill tried to spin the sale as a win in a presser.<\/p>\n

This is a transformative transaction that should maximize immediate value to our shareholders while maintaining ownership in a pure play consumer cyber safety business with predictability, growth and strong consistent profitability.<\/em><\/p>\n

\"Symantec<\/a>Symantec’s struggles<\/strong> in recent years which may have lead to the buy-out are chronicled by<\/a> Channele2e<\/em>. Former CEO<\/strong> Greg Clark resigned<\/strong> in May 2019 amid weak enterprise cybersecurity software revenues. Executive team departures over the past year have also included Symantec\u2019s CFO<\/strong>, chief operating officer<\/strong>, chief marketing officer<\/strong> and the head of its go-to-market<\/strong> teams. Board member Rick Hill has been interim president and CEO of the company since that time.<\/p>\n

Symantec was late to cloud<\/strong>-and mobile-centric cybersecurity services, and faced intense competition<\/strong> from next-generation endpoint protection providers, including:<\/p>\n