LifeLock (News - Alert) made a name for itself by offering insurance against cyberfraud and related theft, a market that proved increasingly valuable over the years as data breaches became a regular fact of life. That was a point not lost on security master Symantec (News - Alert), who recently agreed to acquire LifeLock in a deal valued at $2.3 billion.
The deal is to be funded by a combination of cash and new debt, with the new debt representing $750 million and the cash to handle the rest of the balance. That asserts the value of a LifeLock share at $24, and given that LifeLock has better than 4.4 million customers at last report, it's not hard to see why Symantec was willing to pay as much as it did.
At last report, the purchase is said to create “...the world's largest consumer security business,” fielding better than $2.3 billion in annual revenue, based on the numbers from the last fiscal year. It's a safe bet, meanwhile, that the numbers haven't gone down in any particularly noticeable fashion. That makes the purchase amount make particular sense as well; one year's combined revenues for the company itself isn't exactly a bad deal, and means a comparatively short payback period. The deal is expected to close early 2017, though the standard closing conditions will apply.
Symantec CEO Greg Clark commented, “As we all know, consumer cybercrime has reached crisis levels. LifeLock is a leading provider of identity and fraud protection services, with over 4.4 million highly-satisfied members and growing. With the combination of Norton and LifeLock, we will be able to deliver comprehensive cyber defense for consumers.”
These days, there's a lot of hay to be made in the field of cybersecurity, thanks to the ongoing threat of data breaches from just about every company that's currently holding records. From retailers to services to even government agencies, every organization is right on ground zero as a target and should be prepared to deal with these matters accordingly. By adding LifeLock to its lineup of services, Symantec is now ready to address every phase of the data breach, from providing protection at the outset to providing protection if the other lines of protection fail and reveal data to hackers. That makes Symantec a force to be reckoned with in the field, and being able to walk into it with a customer base of 4.4 million who probably won't be giving up their policies any time soon is a smart business move that augments Symantec's offerings and makes it more viable.
It's safe to say Symantec has made a smart move here—time will tell just how smart—and it's picked up a company with a great complementary offering that only makes its own operations look better for it.