Broadcom buys the $10.7 billion safety company from Symantec, the businesses announced on Thursday. The agreement efficiently divides Symantec into two and Broadcom takes over its entire safety portfolio and the brand name Symantec. Symantec will maintain its consumer-facing product portfolio, including the LifeLock brand and Norton anti-virus software.
In the 2019 fiscal year, the Symantec company generated $2.3 billion in income. In the first quarter of its 2020 fiscal year, Broadcom anticipates the agreement will conclude, leading in more than $1 billion in synergies of run-time costs within 12 months.
Broadcom CEO Hock Tan has been in the process of acquisition in latest years, with the firm pushing a significant pivot into the software industry of the business.
Broadcom announced last July that it was purchasing $18.9 billion in money from CA Technologies, working to expand further than semiconductors and storage systems. In 2016, Broadcom purchased Brocade in a $5.5 billion agreement that combined chips from Broadcom and networking techniques from Brocade.
“M&A played a key role in Broadcom’s development plan and this transaction marks the next logical step in our approach following our Brocade and CA Technologies purchases,” said Tan.
“Symantec’s company safety company has been acknowledged as a well-established leader in the increasing safety area of the company and has created some of the world’s strongest protection solutions to safeguard against today’s changing threat environment and safety information from an endpoint to cloud. The plan covers the closure of installations and data centers, which means costs of approximately $100 million; $75 million for severance and termination benefits; and $25 million for site shutdowns.
In the financial sector, Symantec recorded a non-GAAP income of 43 cents per share of $1.24 billion in Q1 revenues. Analysts expected an income of $1.19 billion of 32 cents per share. Symantec’s shares increased by almost 4% after hours.
In the 2019 fiscal year, Symantec generated $2.3 billion in income or about half of its overall income. The segment sells software for businesses and governments to detect device assaults and track, among other things, the use of cloud services. Cisco, Crowdstrike, Microsoft, Palo Alto Networks and Zscaler are the company’s rivals.
“It is definitely great that AVGO can do that here. Symantec was plagued with turnover, restatements, and execution problems and better-oriented management could do well,” Bernstein Research Analysts headed by Stacy Rasgon wrote in a note distributed to customers Thursday before the agreement was announced.