LifeLock is Symantec’s latest billion-dollar acquisition
2016 marked the second time on record when technology deals accounted for the majority of the M&A (mergers and acquisitions) made in a year. It seems Symantec (SYMC) is keen to become an active participant in this trend. On November 20, 2016, Symantec announced the acquisition of LifeLock, an identity theft protection company.
Symantec has agreed to pay $2.3 billion for LifeLock, which translates to a valuation of $24 per LifeLock share, and a 15.7% premium over LifeLock’s closing price on November 18, 2016, of $20.75. LifeLock’s stock rose to a one-year high on November 18, on the back of its buyout news. Subject to regulatory approval, the deal is expected to close in calendar 1Q17.
We’ll discuss how this deal increases the leverage on the Symantec’s balance sheet later in this series. It appears Symantec hopes to take advantage of LifeLock’s expertise in the security space. After investing in the company in 2009, as stated by SiliconANGLE Media, it finally announced its acquisition in 2016.
LifeLock was founded in 2005 and became a public company in 2013. Through its subscription service, it aids customers in detecting the suspicious use of their identity information to get credit, loans, or other services. It helps in the detection of possible suspicious activity, alerting its customers to that activity and thereby assisting them in restoring their identity details.
In December 2015, LifeLock had to pay $100 million in FTC (Federal Trade Commission) charges due to deceptive and misleading advertising and failure to maintain an exhaustive information security program.