McAfee Eyes Bid For Rival Antivirus Company -- WSJ
December 10 2019 - 3:02AM
Dow Jones News
Consumer software firm NortonLifeLock has lured bids from
several suitors
By Cara Lombardo, Corrie Driebusch and Miriam Gottfried
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (December 10, 2019).
NortonLifeLock Inc., the $16 billion consumer-software company,
has attracted deal interest from a handful of companies including
rival McAfee LLC, people familiar with the matter said.
Among the options being considered, according to the people, is
a combination with the consumer business of McAfee, the
antivirus-software company owned by Intel Corp. and private-equity
firms TPG and Thoma Bravo LLC.
McAfee and its owners join Permira and Advent International
Corp. as potential suitors for NortonLifeLock. The Wall Street
Journal previously reported that those private-equity firms had
made a bid for the business.
NortonLifeLock, based in Mountain View, Calif., is the new name
for Symantec Corp. since that company closed a $10.7 billion deal
to sell its enterprise-security business to Broadcom Inc. in early
November. The newly christened company, which had a market value of
around $15.8 billion at its closing share price Monday of $25.40,
primarily sells Norton antivirus software and LifeLock
identity-theft-protection products.
Permira and Advent made an approach before the Broadcom deal
closed. They proposed a takeover that would have valued Symantec at
$26 to $27 a share and handed them the consumer operation while
preserving the sale of the enterprise business to Broadcom, a major
chip and software producer. But they failed to reach an agreement
before the enterprise sale closed.
Broadcom had earlier this year considered a deal for all of
Symantec and was close to one before the talks fell apart at the
last minute. Permira and Advent also previously considered such a
deal.
There is no guarantee a deal will be struck this time, and none
is likely before the first quarter of next year given that six of
NortonLifeLock's 12 directors, including chairman Daniel Schulman,
are planning to leave after the company's annual meeting Dec.
19.
NortonLifeLock on Nov. 7 named Vincent Pilette as chief
executive officer, replacing interim CEO Richard Hill, who left
when the Broadcom sale closed. Mr. Pilette and a new independent
director are expected to be elected at the annual meeting, paving
the way for the new board to discuss alternatives soon after, some
of the people said.
McAfee earlier this year was planning a return to the public
markets, but the spotty performance of recent technology IPOs has
prompted it to more seriously consider other options including an
outright sale, some of the people said. Under such a scenario, its
enterprise and consumer units could potentially go to different
buyers.
Should NortonLifeLock move forward with a deal, it would be one
of the largest recent technology takeovers -- and potentially one
of the largest leveraged buyouts too.
Activist investor Starboard Value LP owns a 7% stake in
NortonLifeLock and has a board seat it will retain after the annual
meeting. Private-equity firms Bain Capital and Silver Lake also own
stakes in NortonLifeLock and will continue to be represented on the
board.
Starboard first took a stake in August 2018 and nominated
directors to what was then Symantec's board. At that time, the
hedge fund argued that the company needed to make operational
changes to improve margins, especially in its enterprise segment.
That business was the world's largest seller of security software
for corporate networks, though the consumer operation is more
profitable.
Symantec had lost billions of dollars in value following
disclosures about unspecified issues with financial reporting
raised by a whistleblower and warnings that it wasn't closing as
many deals as expected in its enterprise unit.
In late September 2018, it ended a four-month probe into its
accounting practices without major restatements of previous
financial results.
Symantec had spent about $7 billion in recent years on two
high-profile acquisitions, cloud-security company Blue Coat, and
LifeLock, that were met with initial enthusiasm from investors. But
those deals did little to jump-start growth, prompting Starboard --
and now potential buyers -- to get involved.
Symantec ultimately struck a settlement agreement with Starboard
that gave the investor representation on its board. But the
company's problems persisted well into this year. In May, Greg
Clark resigned as Symantec's CEO when the company signaled its
results would disappoint.
Write to Cara Lombardo at cara.lombardo@wsj.com, Corrie
Driebusch at corrie.driebusch@wsj.com and Miriam Gottfried at
Miriam.Gottfried@wsj.com
(END) Dow Jones Newswires
December 10, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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