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.
