Broadcom Monday completed the blockbuster acquisition of Symantec’s US$2.5 billion Enterprise Security business that was first announced in August.
The semiconductor manufacturer said that the Symantec Enterprise Security business will continue to be led by Art Gilliland, who has overseen the division’s product and engineering teams since November 2018. The consumer business of Symantec, meanwhile, will remain an independent, publicly traded entity and has immediately changed its name to NortonLifeLock.
“We are excited to join Broadcom as it continues to build one of the world’s leading infrastructure companies,” Gilliland said in a statement. “Broadcom has a proven track record of successfully integrating companies, enabling enhanced growth and a faster pace of innovation.”
Broadcom’s stock rose 1.45 percent, to US$300.90 in trading Monday morning. The close of the $10.7 billion Broadcom-Symantec Enterprise Security deal was announced before the market opened.
The company said it plans to enhance its investment around the Symantec enterprise security endpoint, web and data loss protection products, while scaling down investment in other areas where the return may not be as profitable. Broadcom intends to achieve $1 billion of cost synergies in the year after the close of the Symantec deal through cuts to sales, marketing, general and administrative functions.
Following the close, Broadcom said it plans to focus on selling Symantec to Global 2000 organizations. Broadcom CEO Hock Tan told investors in August that business with smaller enterprises and SMBs tends to be less sticky and “bright shiny objects” tend to be a major draw.
“Today represents an important milestone as Symantec’s Enterprise Security business joins our other semiconductor and software franchises that together form the Broadcom platform,” Tan said Monday in a statement. “Symantec’s Enterprise Security business expands our footprint of mission-critical infrastructure software for the Global 2000.”
On the flip side of the coin, NortonLifeLock will begin trading on the Nasdaq stock exchange Tuesday under the ticker symbol “NLOK”.
“By unlocking value from Enterprise Security, we have established an independent and singularly focused consumer Cyber Safety business,” said NortonLifeLock interim President and CEO Richard Hill in a statement. “NortonLifeLock is already a world recognized leader in consumer and small business Cyber Safety. The singular focus will allow us to fuel growth and continue innovation.”
Hill had served as Symantec’s interim president and CEO since the sudden resignation of Greg Clark in May 2019. The stock of Symantec (future NortonLifeLock) rose 1.43 percent, to US$23.74 in trading Monday morning.
Even though Symantec’s consumer safety segment —which included both the Norton and LifeLock product lines— made up just 51 percent on the company’s overall revenue in the quarter ended June 30, the segment ending up generating a massive 90 percent of the entire company’s operating income, Hill told investors in August.
“The launch of NortonLifeLock today is a key step in our transformation towards a stand-alone, pure-play consumer Cyber Safety business,” NortonLifeLock CFO Vincent Pilette said in a statement. “As we move through the transition period over the next twelve months, we will realign our cost structure for the company to drive revenue growth, cash flow generation and earnings power.”
Pilette has served as Symantec’s CFO since May. He previously spent nearly six years as CFO at consumer electronics player Logitech.