American semiconductor maker Broadcom, Inc. (NASDAQ: AVGO) on Thursday said it will buy Symantec Corp.’s (NASDAQ: SYMC) enterprise security business in a USD 10.7 Billion all-cash deal as it aims to diversify beyond chip making. Shares of Broadcom opened half a percent lower on Friday, while shares of Symantec remained flat.
Broadcom said the addition of Symantec’s enterprise security portfolio will “significantly expand” its infrastructure software footprint as the Company continues to build up its infrastructure technology.
“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,” said Hock Tan, President and Chief Executive Officer of Broadcom
The Symantec business is forecasted to add USD 2 Billion to Broadcom’s annual revenue going forward, Broadcom said. The transaction is also expected to generate savings of over USD 1 Billon within 12 months following the deal’s expected close in Broadcom’s first quarter of 2020.
The acquisition of Symantec’s business is Broadcom’s latest strategic buy. In 2017, it purchased American data storage company Brocade Communications Systems in a USD 5.5 Billion deal. Last November Broadcom bought software company CA Technologies in a transaction valued at USD 18.9 Billion
Broadcom on Thursday also reaffirmed its full-year 2019 revenue guidance of USD 22.5 Billion, USD 17.5 Billion of which will come from semiconductor solutions and USD 5 Billion from infrastructure software.