Broadcom is close to making a deal to acquire Symantec’s enterprise business, and could announce an agreement on Thursday, according to the Wall Street Journal.
The deal, should it indeed go through, comes after San Jose, Calif.-based Broadcom’s earlier move to acquire all of Symantec collapsed.
The Journal late Wednesday said the deal, which would likely value Symantec’s enterprise business at around $10 billion, is likely to be announced Thursday, which also happens to be the same day Symantec reports its first fiscal quarter 2020 financial results.
Symantec stock spiked more than 13 percent in after-hours trading on Wednesday after the report surfaced.
Mountain View, Calif.-based Symantec offers security technology for enterprises, small businesses, and consumers, the latter via its Norton product line. The small business line is primarily cloud-based.
It is not clear whether the part that Broadcom may acquire is just the enterprise business, or both the enterprise and small business parts. The Journal reported that the value of the business under consideration is for $10 billion, whereas Symantec as a whole has a total value of $12.6 billion with about $2 billion worth of debt.
Symantec’s business focus accounts for about half of the company’s total revenue, the Journal said.
Reports swirled July 3 that Broadcom was in “advanced talks” to buy platform security giant Symantec as the chipmaker looks to diversify its portfolio, and by July 8, it appeared that Broadcom had secured the funding to purchase Symantec in what was then expected to be a $22-billion-plus deal, including debt.
However, Broadcom and Symantec on July 15 appeared to have halted negotiations, although reports said that Broadcom was still interested in a deal.
Broadcom and Symantec did not respond to requests for more information by press time.
Partners told CRN last week that they don’t see many advantages in bringing Broadcom and Symantec together under one roof. One solution provider said the technologies offered by the two companies are very different and don’t provide for many natural adjacencies or synergies.
“I had no idea a chipmaker would make a play for an internet security company,” the channel partner said. “I don’t see much in the way of advantages to this. We’re not in the chip distribution business.”
A takeover of Symantec would come less than a year after Broadcom made its first foray into software with the $18.9 billion acquisition of CA Technologies. That deal spurred some investors to express concern that Broadcom CEO Hock Tan’s acquisition strategy was being stretched too far, according to Bloomberg.
The CA Technologies transaction came after Broadcom dropped its $117 billion bid to buy rival chipmaker Qualcomm, which was scuttled after President Donald Trump blocked the deal due to national security concerns.
The last 14 months have been tumultuous for Symantec, culminating in the sudden May 2019 resignation of Clark from all roles effective immediately. Since then, Symantec has been led on an interim basis by former Novellus Systems Chairman and CEO Richard Hill.
A Broadcom-Symantec deal would be the second marriage between a chipmaker and an anti-virus vendor this decade, coming eight years after Intel purchased top Symantec competitor McAfee for $7.7 billion. The anticipated synergies never materialized, and Intel ended up spinning off McAfee to private equity firm TPG in a 2016 sale that value the business at $4.2 billion.