Symantec to acquire Brightmail for US$370 million

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In a move that could alter the alignment of the anti-spam marketplace, security vendor Symantec announced late Wednesday that it has signed an agreement to acquire anti-spam vendor Brightmail for around US$370 million in cash.

The deal, which is still subject to regulatory approval, was announced just one day after Brightmail reportedly stated intentions to file for an initial public offering.

It was unclear how the acquisition would impact solution providers in Brightmail's extensive channel program, but officials at Symantec said that resellers currently selling Brightmail solutions would be 'welcomed' into the Symantec channel.

The Brightmail Anti-Virus solution already integrates some of Symantec's antivirus technology. According to John Thompson, Symantec's chairman and CEO, the acquisition will only improve the way the two technologies work together, eventually leading to a stronger integrated approach to security overall.

'Spam has increasingly become one of the most severe threats to individuals and enterprises today,' he said in a statement. 'Brightmail is the leader in helping enterprises, service providers, and wireless carriers mitigate this threat, and their technology is a critical component of a comprehensive gateway security solution.'

At Brightmail, officials were equally excited about the acquisition, and about reaping the benefits of integrating their product with a larger platform.

'Merging with Symantec reaffirms the vision we had [from the beginning],' said Sunil Paul, who founded the firm in 1998. 'We saw a business opportunity in protecting e-mail users from the threat of spam and that opportunity has been realised.'

Specifics on how Symantec would incorporate Brightmail solutions were sketchy, but officials from both firms said in a conference call that these details would become clearer over the next few weeks.

In addition to Brightmail Anti-Virus, Symantec would acquire Brightmail Reputation Service, which blocks messages from identified spam sources, and Brightmail Anti-Fraud, which blocks fraudulent e-mails that mimic legitimate communications in order to steal financial and personal data.

While news of the acquisition came as a surprise to some, other industry insiders noted that they saw it coming. Brightmail had written in its IPO registration statement that it would use the proceeds to strengthen and broaden its offering, heightening speculation that there may be acquisitions in the pipeline and potential consolidation within the e-mail filtering industry.

'I think this is good for [both companies],' said Fred Felman, vice president of marketing at San Francisco-based Zone Labs. 'It's amazing that [Brightmail] went this route so close to going public, but with the two technologies as part of the same suite, [Symantec and Brightmail] should be able to protect everybody.'

Still, others wondered aloud how the acquisition would impact some of the technology partnerships Brightmail has carved over the years. Currently, the firm provides its signature-based anti-spam filtering to other vendors such as Microsoft, Sun, Oracle, and BorderWare.

From the channel perspective, reaction to the move was generally positive. David Sockol, president and CEO of Emagined Security, said that once the companies combine forces, the resulting technologies would allow his firm to offer spam and fraud solutions that have not been fully incorporated into network systems on any level.

'The addition of Brightmail to the Symantec's comprehensive product and service offerings will help control spam and fraud,' he said. 'This acquisition will allow Symantec's customers to gain control of a threat base that has been continually growing without necessary levels of protection.'

Symantec invested an undisclosed amount in Brightmail in July 2000 and currently holds an equity stake of approximately 11 percent.

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