Symantec To Buy LifeLock For $2.3 Bln; Backs Outlook; To Buy Back Addl. Shares

(RTTNews) - Cyber security company Symantec Corp. (SYMC) announced late Sunday its definitive agreement to acquire LifeLock, Inc. (LOCK) for $24 per share or $2.3 billion in enterprise value. The company also reconfirmed its forecast for fiscal 2017 and fiscal 2018.

Further, Symantec's board of directors has increased its share repurchase authorization to $1.3 billion from approximately $800 million, with up to $500 million in repurchases targeted by the end of fiscal 2017.

The acquisition of LifeLock, a provider of proactive identity theft protection services, is expected to make Symantec the world's largest consumer security business with over $2.3 billion in annual revenue.

Greg Clark, Symantec's CEO, stated that with the combination of consumer Security brand Norton and LifeLock, the company would be able to deliver comprehensive cyber defense for consumers.

The deal was approved by the boards of directors of both companies. The company expects to close the acquisition in the first calendar quarter of 2017, subject to customary closing conditions including LifeLock stockholder approval.

Symantec expects the transaction to have no impact to its quarter ending December 30, 2016, as well as its fiscal year 2017 financial results. Symantec expects the transaction to be accretive to non-GAAP earnings per share in fiscal year 2019.

The company also expects to achieve additional revenue upside through higher ASPs and improved retention rates.

Tempe, Arizona-based LifeLock was reportedly pursued by bidders including private equity firms Permira, TPG and Evergreen Coast Capital, the new buyout arm of hedge fund Elliott Management.

Hilary Schneider, CEO of LifeLock, said, "After a thorough review of a broad range of alternatives, our board of directors unanimously concluded that Symantec is the ideal strategic partner for LifeLock and offers our shareholders a significant premium for their investment, at closing."

Symantec expects to finance the transaction with cash on the balance sheet and $750 million of new debt.

Further, Symantec reaffirmed its prior fiscal year 2017 financial guidance. For 2017, the company continues to expect adjusted earnings per share of $1.12-$1.18, adjusted revenue of $4.04 billion to $4.12 billion, and adjusted operating margin of 27-29%.

On average, analysts polled by Thomson Reuters expect earnings of $1.16 per share on revenues of $4.08 billion for the year. Analysts' estimates typically exclude special items.

The company also reaffirmed its prior fiscal year 2018 adjusted earnings per share guidance of $1.70-$1.80. Analysts expect earnings of $1.72 per share for the year.