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Tuesday, January 30, 2007
Jim Finkle
BOSTON: Symantec Corp., maker of Norton antivirus software, said on Monday it will buy Altiris Inc. for about $830 million as it expands into the corporate software market from its previous consumer focus.
Altiris makes software that helps companies manage and maintain information-technology assets, from laptop computers, desktops and mobile devices to servers and storage assets.
Symantec said it agreed to pay $33 per share in cash for Altiris, representing a 21.6 per cent premium over Altiris' closing share price on Friday of $27.14.
Shares in Altiris surged 21 per cent to $32.77 in early trading on the Nasdaq after the deal was announced.
Symantec slipped 1.5 per cent, to $17.50, amid concern that the acquisition could distract company executives from contending with a shortfall in its own financial targets.
On Jan. 16, Symantec warned of disappointing December quarter results and cut its full-year outlook.
"The timing of this acquisition is not ideal," Friedman, Billings, Ramsey analyst Daniel Ives said in a note to clients, "With Symantec just coming off a very disappointing December quarter, coupled with weak guidance, we believe now is the time to get Symantec's own house in order, not to start acquiring more technologies in tangential product areas."
The acquisition comes about two years after Symantec entered the corporate software market with its $13.5 billion purchase of storage software company Veritas.
Analysts have said that acquisition, which closed in July 2005, has proven tough to integrate into the rest of Symantec's operations and say it is partly behind the company's earnings disappointment.
DELL AGREEMENT A CATALYST
Symantec Chief Executive John Thompson said the company's interest in Altiris peaked after it entered a development and license agreement in November with Dell Inc.
"We have had Altiris on our M&A roadmap for quite some time," Thompson said on a conference call with analysts. "Post their transaction with Dell we saw immediate synergies ... Given the unique nature of this property it was important for us to move fast."
"Added to our portfolio, (Altiris) makes us infinitely more competitive with the likes of a Microsoft," he said.
The deal is expected to close in the second quarter, pending approval from regulators and Altiris shareholders, Symantec said.
Symantec said it would to keep Altiris operating as a separate team in the near-term, and expected the company to contribute to its revenue growth.
Altiris said on Monday that it expects to report fourth-quarter and full-year 2006 revenue and earnings at the upper end of its earlier outlook. The company is due to release results on Feb. 5.
The company had previously forecast revenue of $57 million to $61 million, and said it saw earnings at the midpoint of this range of 25 cents a share, excluding amortization and stock-compensation expenses.
(Additional reporting by Tiffany Wu and Michele Gershberg in New York and Rakesh Sharma in Bangalore)
Source: Reuters
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