Broadcom closes in on $15B Symantec buy

Broadcom closes in on $15B Symantec buy

Struggling security vendor prepares for new ownership

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Broadcom is in advanced talks to acquire Symantec for a fee of around $15 billion, according to mounting media speculation.

According to reports from the Financial Times, a deal could be unveiled to the market within the next 24 hours, despite warnings that a final agreement hadn’t yet been signed.

“Broadcom’s potential purchase of another asset with $4+ billion in software sales is likely its most ambitious deal yet - leaderless Symantec has been losing share, even in its core segments,” said Anand Srinivasan, technology analyst when speaking to Bloomberg Intelligence. “Broadcom CEO Hock Tan will likely need to aggressively cut Symantec costs while keeping sales stable.”

Speculation comes almost two months after Symantec's chief executive officer stepped down unexpectedly, the same day the anti-virus software maker issued a profit warning, sending the shares plunging in after-hours trading.

As reported by Channel Asia, Symantec replaced Greg Clark with director Richard Hill on an interim basis. Hill was formerly CEO of semiconductor maker Novellus Systems, giving him experience in enterprise sales, an area where Symantec has faltered.

“It wasn’t a total surprise,” observed Eric Parizo, senior analyst at Ovum. “A change at the top had become inevitable. After several years of strategic realignment and largely positive momentum, Symantec’s fortunes of late have been rapidly deteriorating."

Australian-born Clark was originally CEO of Blue Coat, prior to the vendor being acquired by Symantec and according to Parizo, was a “surprise pick” to spearheaded the combined entity.

“Naturally, he brought many of his top lieutenants with him,” Parizo said. “His strategy was to combine Symantec’s best existing technology with cutting-edge acquisitions including Skycure and Fireglass, transforming Symantec into the go-to vendor for securing users, devices, data, and applications as enterprises shift their infrastructure to the cloud. Innovation was starting to make a comeback at Symantec.”

With Clark now sidelined, and Hill at the wheel for the foreseeable future, the security vendor has its sixth CEO within 10 years.

“What happens next?” Parizo asked. “While Symantec’s board might be tempted to find an outsider with a fresh perspective for its next permanent CEO, the wisest choice may be EVP Art Gilliland.

“The enterprise products chief recently returned to Symantec after high-profile stints at Skyport Systems and Hewlett Packard Enterprise, and his familiarity with the vendor’s current strengths and past mistakes would be invaluable.”

At the time of Clark’s departure in early May, Parizo cautioned that the coming months “won’t be easy” for Symantec.

“With legal and regulatory uncertainties lingering and a massive product portfolio that may require culling, difficult choices lie ahead,” he explained. “The vendor must decide what it wants to be; getting smaller and more focused wouldn’t be a surprise.

“As for Clark’s tenure, despite the promise when it began, history may note it as merely the latest Symantec reinvention effort to fall short. Yet if Symantec can find a way to leverage its unique assets and innovative capabilities while modernising its venerable legacy solutions, its future might prove brighter than it seems today.”

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