LifeLock Stock Skyrockets on This News
Lifelock Inc (NYSE:LOCK) stock is on its way to zoom past its 52-week high of $20.96 on account of a big announcement that was made over the weekend. The LOCK stock was trading up by 14% in pre-market. However, Symantec stock is trading a bit lower.
Symantec Corporation (NASDAQ:SYMC), which is the parent company of Norton, has entered into an agreement to acquire Lifelock Inc, the leader in identity protection. Symantec will acquire Lifelock for $24.0 per share, or $2.3 billion in enterprise value. The deal has been approved by the boards of directors of both companies, and is expected to close in the first calendar quarter of 2017. (Source: “Press Release,” Symantec Corporation, November 20, 2016.)
The deal will create the world’s largest consumer security business, with over $2.3 billion in annual revenue based on last fiscal year revenues for both companies. The increased portfolio is good for Symantec Corporation, and the enhanced revenue will boost SYMC stock.
Symantec Stock to Gain from Digital Safety Focus
Symantec, which is the leading company in cybersecurity, said that the Lifelock acquisition will form the world’s largest digital safety platform for consumers. As per the company data, in the last year, one-third of American citizens—and over 650 million people globally—were the victims of cybercrime. This makes digital safety a topmost concern for many people, which has led to cybersecurity becoming an estimated $10.0-billion market, growing in the high single digits.
Symantec CEO Greg Clark stated, “Consumer cybercrime has reached crisis levels. Lifelock is a leading provider of identity and fraud protection services, with over 4.4 million highly satisfied members and growing. With the combination of Norton and Lifelock, we will be able to deliver comprehensive cyber defense for consumers.”
Clark further said that this acquisition marks the transformation of the consumer security industry from malware protection to the broader category of “Digital Safety” for consumers.
SYMC stock has returned about 34% year-to-date as compared to the broader S&P 500, which has gained about nine percent in the same period. LOCK stock has posted impressive gain of 45% year-to-date returns.
Lifelock CEO Hilary Schneider 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.”
The deal value of $24.00 per share is at a premium of almost 16% to the closing price of $20.75 of Lifelock stock on Friday.
Symantec stock is trading at around $23.40. The acquisition will help Symantec integrate Lifelock Inc services with Symantec’s Norton antivirus businesses and address the expanding needs of the consumer marketplace. Lifelock stock shareholders also benefit from the deal, as LOCK stock is likely to remain buoyant.