RealTime IT News

Firms Merge to Form Security Powerhouse

In a move bound to leave smaller Internet security firms shaken, Symantec Corp. bought AXENT Technologies Inc. in a stock deal valued at $975 million.

AXENT shareholders will receive in a tax-free exchange 50 cent shares of Symantec common stock for each share of AXENT common stock they own. Based upon Symantec's closing price of $63.69 on Wednesday, this represents a price of $31.84 per AXENT share. Symantec will issue approximately 15.3 million shares of common stock to AXENT shareholders to complete the transaction.

With the purchase, Symantec will combine AXENT's content filtering, host- and network-based intrusion detection, vulnerability assessment and firewall capabilities with it's industry-leading virus protection suite.

The new company will combine service offerings to provide a broad range of security services and consulting, leveraging one of the largest dedicated teams of security experts in the industry.

"Symantec's content security market leadership and established brand name coupled with AXENT's enterprise relationships, complementary products and security services position us to be the market leader," said John W. Thompson, Symantec's chairman, president and chief executive officer.

"Together we will span the needs of all customers from emerging businesses to the largest enterprises. We expect the combination to deliver robust revenue growth over the next several years."

The firms are so confident in their impending wealth that Symantec is forecasting revenue growth to increase from 20 percent in fiscal year 2001 to 27 percent in fiscal year 2002 and 30 percent in fiscal year 2003. Symantec estimates its total market opportunity increases from $5 billion to $7 billion.

Greg Coticchia, a spokesperson for AXENT, told internetnews.com Thursday the play should put a wide gulf between AXENT and smaller competitors because the new company will provide all of the services that single product-focused competitors such as Check Point Software Technologies (firewall security) and Internet Security Systems (intrusion detection) offer.

"This deal happened very fast and we are moving aggressively to implement a full, robust security solution for e-businesses," Coticchia said. "It's very indicative of how quickly the security market space is growing. Companies are looking to deploy security systems before they set up -- five years ago security was an afterthought."

The transaction is expected to be accounted for under the purchase accounting method and is expected to close by the end of the year.