Broadcom is set to acquire Symantec Corporation's enterprise security business for $10.7 billion in cash, the company announced Thursday. The move builds on Broadcom's $18.9 billion acquisition of CA Technologies last July.
Broadcom plans to weave Symantec's offerings into its portfolio license agreement (PLA) strategy, which follows the "everything as a service" solutions model and draws on a recurring revenue stream.
- The deal turns Symantec into a pure play firm, focused on its consumer cybersecurity business, Norton LifeLock, according to Rick Hill, interim president and CEO of Symantec, in its announcement. He said the consumer business is "steady, predictable and we believe can grow at mid-single digits, generating strong cash flow and earnings."
Security firms, like Symantec and McAfee, have struggled to assert dominance in the endpoint market, leaving room for customers to second-guess the reliability of security vendors.
In May, Symantec CEO Greg Clark stepped down from his role, and the company's EVP and CFO Nicholas Noviello left the company in January.
Along with a C-suite overhaul, Symantec has faced declining momentum in revenue growth, struggles with business for the company's Enterprise Security segment, an internal audit and an 8% reduction in its global workforce, according to the company's March year-end annual report.
Symantec expected the Enterprise Security segment to continue negatively impacting margins, according to its Q4 FY 2019 results. Revenue from the enterprise business was "below our guidance range due to lower than expected bookings."