Broadcom is buying Symantec's enterprise security business for $10.7 billion, the companies announced Thursday. The deal effectively splits Symantec in two, with Broadcom taking ownership of its entire enterprise security portfolio and the Symantec brand name. Symantec will retain its consumer-facing product portfolio, which includes the the LifeLock identity-protection brand and Norton antivirus software.
The Symantec enterprise business produced $2.3 billion in revenue in the 2019 fiscal year. Broadcom expects the deal to close in the first quarter of its 2020 fiscal year, resulting in more than $1 billion in run-rate cost synergies within 12 months.
Broadcom CEO Hock Tan has been on an acquisition spree in recent years as the company pushes through a major pivot into the enterprise software market.
Last July Broadcom announced that it was buying CA Technologies for $18.9 billion in cash as it worked to expand beyond semiconductors and storage. In 2016 Broadcom bought Brocade in a $5.5 billion deal that brought together Broadcom's chips and Brocade's networking technologies.
"M&A has played a central role in Broadcom's growth strategy and this transaction represents the next logical step in our strategy following our acquisitions of Brocade and CA Technologies," said Tan.
"Symantec's enterprise security business is recognized as an established leader in the growing enterprise security space and has developed some of the world's most powerful defense solutions that protect against today's evolving threat landscape and secure data from endpoint to cloud. We look forward to expanding our footprint of mission critical infrastructure software within our core Global 2000 customer base."
Meanwhile, Symantec, which also reported its Q1 financial results today, announced a restructuring plan that will cut approximately 7% of its workforce. The plan includes the closure of facilities and data centers, resulting in costs of around $100 million; $75 million for severance and termination benefits and $25 million for site closures.
As for financials, Symantec reported Q1 non-GAAP earnings of 43 cents per share on revenue of $1.24 billion. Analysts were expecting earnings of 32 cents per share on revenue of $1.19 billion. Symantec shares were up nearly 4% after hours.