Symantec and Blue Coat, Inc. have announced that they have entered into a definitive agreement under which Symantec will acquire Blue Coat for roughly $4.65 billion in cash. Blue Coat had previously considered an IPO but backed away in favor of the acquisition.
The transaction has been approved by the Boards of Directors of both companies and is expected to close in the third calendar quarter of 2016.
Greg Clark, currently Chief Executive Officer of Blue Coat, will be appointed Chief Executive Officer of Symantec, replacing Mike Brown, who announced his resignation as Symantec CEO in April. Clark will also join the Symantec Board upon closing of the transaction.
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In order to finance the deal, Bain Capital, Blue Coat’s majority investor, will invest an additional $750, whiles private equity firm Silver lake, which has already invested $500 million in Symantec, will add another half billion to the cash deal. Symantec intends to finance the transaction with cash on the balance sheet and $2.8 billion of new debt.
For Blue Coat’s fiscal year ending April 30, 2016, GAAP revenue was $598 million and non-GAAP revenue was $755 million, with 17% year-over-year growth. For the same time period, the company had non-GAAP operating margins of 22% and cash flow from operations of $135 million. Also for this time period, GAAP operating margins were -42%.
“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. 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,” said Dan Schulman, Chairman of Symantec, in a prepared statement.
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