Symantec in $800m takeover of Altiris

Symantec Corp is to drive the convergence of endpoint systems security and device operations management with the acquisition of Altiris Inc in a deal calculated to be worth around $830m, net of the target company's $200m cash balance.

Symantec said it plans to merge technology and features from Altiris into its own endpoint security products that deal with threat prevention, system back-up, and compliance issues.




AdvertisementAltiris provides various systems management tools that automate the control of server, desktop, and mobile client devices. Its software assets range from systems for configuration management, service desk automation, and software image deployment to patch control and vulnerability management. It has also moved into application virtualization, an approach that decouples the application from the operating systems, and which it is applying to remote desktop management.

In a conference call, executives of both companies made the case that a combination of the two product sets would make for a comprehensive end-point management control platform that would automate client and security management across desktop or handheld devices of any type and across the full range of operating system options.

"We believe we can offer customers a more comprehensive solution to protect and manage the millions of connected devices that make up the fabric of today's IT infrastructure," said John Thompson, CEO of Symantec. The aim is for systems that better manage and enforce security policies at the endpoint, and identify and protect against threats.

Over the past six years the Altiris portfolio of systems tools has been extended so it can be used to handle most aspects of the lifecycle management of desktop, server, and mobile assets, through product development and acquisition most recently of Pedestal Software Inc, which saw it add security and vulnerability audit products. Before that it bought Wise Solutions Inc, an application deployment management and Windows installer specialist, as well as FSLogic Inc, Bridgewater Technologies Inc, and Tonic Software Inc.

"The deal would be an all-cash transaction, paid from existing liquidity," said James Beer, CFO of Symantec of the transaction announced yesterday. Under the terms of the agreement, Altiris stockholders will receive $33 per share in cash, which represents a 22% premium on closing prices before the deal was announced. Back-office cost savings would make the deal accretive to the company's 2008 fiscals, according to Beer, thanks to prospective savings that he said would be made in G&A costs, facilities consolidation, and various "royalty opportunities".

Once the deal closes by the end of June 2007, Altiris will be run as a separate business division of Symantec headed by existing Altiris president and CEO Greg Butterfield. He will need to manage some necessary product rationalization, as the companies do have some overlapping product lines in areas such as imaging and client management. Commercially, Symantec has a better hold in the large enterprise segment with a product like OnTechnology, whereas Altiris is stronger in the SME markets.

The Lindon, Utah-based vendor also has deals with various PC makers that will see its client management software used as part of Dell Inc's Open Manage Client Administrator suite and the DeskView package of Fujitsu Siemens Computers. Symantec believes the existing channel strategies are complementary.

Altiris claims 20,000 customers currently use its systems. The business is consistenty ranked as one the industry's fastest growing software companies, having produced annualized growth rates over the past five years in excess of 110%. Fiscal year 2006 guidance offered on the company's third-quarter earnings call was for revenue in the range of $226m to $230m.

Symantec had earlier acquired the operations management vendors of Veritas, Bindview, and Relicore.