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Was LifeLock’s Sale Profitable for Elliott Management?

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Nov. 30 2016, Updated 11:04 a.m. ET

LifeLock attracted the interest of private equity firms

Earlier in this series, we discussed Elliott Management’s influence over Symantec (SYMC) and its subsequent strategic acquisitions of Blue Coat Systems and LifeLock. In early November 2016, LifeLock hired the services of Goldman Sachs (GS) to initiate its sale.

Along with Symantec, PE (private equity) firms Permira and TPG showed interest in Lifelock’s sale. The cybersecurity space appears to be closely monitored by private equity firms. In late August 2016, PE firm Apollo Global Management agreed to buy Rackspace (RAX) for $4.3 billion. In the past, Bain Capital acquired Blue Coat Systems, which provides security and network offerings. Symantec then acquired Blue Coat Systems from Bain Capital. Warburg Pincus also has investments in CrowdStrike, which provides security technology and services.
elliott mgmt targets

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Double-digit returns for Elliott Management

Like Symantec and PE firms, Elliott Management was also interested in LifeLock. According to Forbes, between June and August 2016, Elliott accumulated an 8.8% active holding, or approximately 7.75 million shares, at the cost of $13 per LifeLock share. Symantec offered to buy LifeLock at $24 per share, which includes the latter’s debt. This means that Elliott Management got an attractive return, of more than 84%, on the LifeLock sale.

However, according to Bloomberg, Elliott Management acquired a stake in LifeLock, at $11–$15 per share. Even at this price, Elliott Management seems to have generated a profitable return on LifeLock.

Moreover, Symantec’s stock rose on LifeLock’s buyout news, thereby increasing the value of Elliott’s stake in Symantec. Therefore, Elliott Management benefited both from Symantec’s acquisition as well as LifeLock’s sale.

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