Symantec
Symantec Corp. announced Sunday it is buying Blue Coat Systems for $4.65 billion. Here, boxes of McAfee security software and Norton Anti-virus software by Symantec are displayed on a shelf at a Target store in Colma, California, August 19, 2010. Getty Images/Justin Sullivan

Cybersecurity firm Symantec Corp. announced Sunday that it was set to acquire Blue Coat Systems, a security and networking solutions company, for $4.65 billion in a cash deal. After the transaction is complete, Blue Coat CEO Greg Clark will also take over as CEO of Symantec, according to the announcement.

“With employees of Blue Coat and Symantec coming together, we will be well positioned to drive meaningful growth and push the boundaries of innovation. I am very excited about the opportunity to join Symantec as CEO and look forward to working with the strongest, deepest team in security to realize the many strategic and financial benefits this transaction will create,” Clark said.

Symantec will spend cash from its balance sheet and take on $2.8 billion in new debt to finance the deal, which is expected to be finished in the third quarter of 2016. Existing Symantec investor Silver Lake is adding another $500 million to its funding, doubling its investment in the cybersecurity firm. Bain Capital, a majority shareholder in Blue Coat, will also make an investment of $750 million in the combined company.

Other than Clark, David Humphrey from Bain Capital Private Equity will also join the board of Symantec.

“With this transaction, we will have the scale, portfolio and resources necessary to usher in a new era of innovation designed to help protect large customers and individual consumers against insider threats and sophisticated cybercriminals,” Chairman of Symantec’s board, Dan Schulman, said in a statement. “Together, we will be best positioned to address the ever-evolving threat landscape, the massive changes introduced by the shift to mobile and cloud, and the challenges created by regulatory and privacy concerns.”

The $4.65 billion valuation was estimated based on the debt and cash balance of Blue Coat as they will be when the transaction closes, and does not include expenses related to the transaction, which is subject to regulatory approvals.

Less than two weeks ago, on June 2, Blue Coat had filed for an initial public offering with Nasdaq, since Bain Capital wanted to list the company publically. That plan is effectively dropped now.

The two companies will hold a joint conference call at 8 a.m. ET Monday to discuss the transaction. The webcast and accompanying slides will be available online.

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