Symantec Said to Be a Thoma Bravo Acquisition Target

Merger rumor

Is private equity firm Thoma Bravo interested in acquiring Symantec?

Symantec’s stock spiked after Reuters reported that Thoma Bravo has approached the cybersecurity giant to express interest in acquiring it. Neither Symantec nor Thoma Bravo is commenting on the report.

Just this week, Symantec announced it has acquired Appthority and Javelin Networks as key technology integrations for its Integrated Cyber Defense platform. And Thoma Bravo is acquiring application security testing firm Veracode from Broadcom for $950 million in cash.

Larry Walsh, CEO and chief analyst of The 2112 Group, and member of the Channel Partners Editorial Advisory Board, said it’s not surprising that Symantec is attracting the interest of a private-equity firm, particularly one “steep in security experience.”

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The 2112 Group's Larry Walsh

The 2112 Group’s Larry Walsh

“The security market continues to expand at a rate of 8-10 percent annually,” he said. “The growth opportunity has investors looking for strong points of entry to this growth opportunity. While Symantec continues to grapple with organizational and performance issues, it remains one of the biggest and strongest security vendors in the market, and a potentially strong platform for an investor like Thoma Bravo.”

Despite some performance and organization issues, Symantec is a strong company and doesn’t necessarily need an acquisition the likes of a private-equity takeover, Walsh said. And the fact that Symantec shares spiked 15 percent shows that it would take a “premium price to pull off an acquisition,” he said.

“For partners, Thoma Bravo buying Symantec is likely a good thing,” he said. “Symantec is investing in its partner community. Thoma Bravo has tremendous experience in building channel-centric security companies. It would stand to reason that if Thoma Bravo pulls off this deal, it will likely invest more in the channel organization to drive growth and increase Symantec’s valuation.”

Rik Turner, principal analyst at Ovum, said going private for awhile would “certainly make sense for Symantec as its board executes on plans to stay relevant and competitive in the ever-evolving cybersecurity market.”

“Temporarily free from the ‘tyranny of Wall Street’, i.e. the need to produce results every quarter to keep the financial analysts happy, Symantec should be able to take more aggressive steps to reposition for growth in the markets it will be targeting,” he said. “(Thoma Bravo) clearly sees the opportunity for more ‘corporate engineering’ in cyber, buying up companies, merging some parts of them together to form new ones, then taking them public again to exit their capital and move on.”

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