Cyber security software maker Symantec has sold its enterprise security business and the Symantec brand to chipmaker Broadcom for $10.7 billion in cash.
Symantec expects to receive $8.2 billion after tax proceeds. Symantec’s revenue from enterprise security unit, which will be part of Broadcom, rose 9.9 percent to $611 million in three months ended July 5, 2019. Symantec’s revenue from consumer security unit, which will continue to be part of the company, reached $636 million in three months.
Broadcom was earlier forced to abandon the takeover of rival chipmaker Qualcomm for $117 billion.
Broadcom last year bought U.S. business software maker CA for $18.9 billion and was in talks to buy infrastructure software company Tibco Software, which was taken private by Vista Equity Partners for $4.3 billion in 2014.
“M&A has played a central role in Broadcom’s growth strategy and this transaction represents the next logical step in our strategy,” Broadcom Chief Executive Officer Hock Tan said.
Broadcom said the Symantec deal is expected to close in the first quarter of its fiscal year 2020 and is subject to regulatory approvals in the United States, European Union and Japan. It plans to raise fresh debt to fund the deal.
Symantec’s enterprise security unit offers a mix of security products and services to business and government customers, helping them improve their security, while reducing cost and complexity.
Symantec has been struggling with severe competition from nimbler rivals and sources had told Reuters last month that it walked away from negotiations to sell the entire company to Broadcom over price disagreements.
Symantec CEO Greg Clark has left the anti-virus software company this year. Rick Hill is the interim president and CEO of Symantec. The US-based Symantec is also being investigated by U.S. regulators over an accounting irregularity.
Symantec will focus on consumer Norton LifeLock business. Consumer Cyber Safety business provides Device Security, Identity Threat Protection and Privacy software that protects consumers and small businesses.
The Consumer Cyber Safety segment contributed 90 percent of Symantec’s total company operating income in the first quarter of fiscal year 2020. Symantec is conducting a search for a permanent CEO for the consumer business.
Symantec plans to cut the global workforce by about 7 percent and will take a charge of about $100 million. It employed more than 11,900 people as of March 29.
Symantec, as part of the restructuring plan, also plans to downsize, vacate or close certain facilities and data centers.