Security giant Symantec overnight said it would acquire email security services provider MessageLabs.
Symantec has signed an agreement to buy MessageLabs for
US$695 million in cash, payable in approximately £310 million sterling and
US$154 million dollars. The agreement is subject to regulatory approval,
but Symantec said it expects the deal to close by the end of the
year.
Jeff Hausman, vice president and general manager of the Symantec
Protection Network, told ZDNet.com.au sister site ZDNet.co.uk that Symantec was acquiring
MessageLabs to gain "leading capabilities" in
software-as-a-service (SaaS) provision.
"We saw tremendous opportunities and a great enterprise fit in
bringing MessageLabs into the fold," said Hausman. "It will allow
us to create a robust platform and a base to expand on for
software-as-a-service, and gives us leading capabilities in hosted
and online service models."
Hausman said that MessageLabs's hosted email service, combined
with Symantec's Brightmail capabilities, would give customers the
choice of using online services, offline products, or a combination
of the two.
"As we work through to the close of the transaction, we can sit
down with customers and work out what the right form factor is for
them," said Hausman. "MessageLabs already uses Brightmail in its
online services, and [the deal] gives customers the opportunity to
use new form factors."
Symantec plans to cross-sell and up-sell its backup and storage
products to MessageLabs existing 19,000-organisation customer base.
"We're looking to provide a portfolio of services and an online
one-stop shop, and to provide a single point of contact," said
Hausman.
MessageLabs and Symantec will combine services under an entirely
new product name, but Hausman declined to comment on what that
would be. "We're still working on it," he said.
Adrian Chamberlain, chief executive officer of UK-based
MessageLabs, welcomed the proposed deal. "From our point of view,
it's a marriage made in heaven," he said. "We're robust
financially and growing, but [the deal] will enable us to secure
additional geographical and channel reach."
Adrian Chamberlain (Credit: MessageLabs)
Chamberlain called the $695m price tag "fair", but
added that the price was in part dictated by the current
instability in the financial markets. "There was a lot of hard
bargaining, but our shareholders feel it's a fair price," said
Chamberlain.
"Clearly there are very few acquisitions being done
at the moment, particularly in cash, and both sides are aware of
asset deflation. [But] MessageLabs is a special company, [and] we
think the future is better with Symantec."
Hausman said Symantec felt satisfied with the price tag.
"Symantec feels we have struck a fair price, and we are confident
we can expand and grow the business," he said.
However, both Chamberlain and Hausman said there would be job
losses as a result of the acquisition. "The intention is to retain
the vast bulk of our [550] employees, but we would be completely
naive if we said there would not be some harmonising," said
Chamberlain, who added that he would be employed as a senior
Symantec vice president, reporting to chief operations officer
Enrique Salem.
The "vast majority of employees will be retained", Hausman
said. "As with any transaction we will look for opportunities to
understand and identify synergies," said Hausman. "We'll be
looking at teams on a case-by-case basis, and there may be some
impact."
The proposed deal comes after Symantec chief executive John
Thompson said on Tuesday that the bulk of Symantec's security,
backup and archiving products and services would be "in the
cloud" by March 2009.
Clearly there are very few acquisitions being done
at the moment, particularly in cash
Adrian Chamberlain
The move mirrors other security vendors extending SaaS
capabilities. In January, Kaspersky launched its own hosted email
service, while McAfee announced plans to acquire Secure Computing,
with its online reputation portfolio, in September.
Security analyst Andy Buss of Canalysis said that he
was "not surprised" by the acquisition plans. "This would fill a
gap we knew Symantec had with online threats, and also this
bolsters Symantec's Brightmail [email security] appliance," said
Buss. "Now Symantec can be in the cloud as well as on the
premises."
Buss said the deal would benefit enterprise customers. "It's
great for enterprises as they can have more trust in a one-stop
shop," said Buss. "MessageLabs would be part of a stable, so
[enterprises] wouldn't have to worry about the company being
bought."
