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Symantec’s LifeLock Buy Is a Lock on Growth

Piper Jaffray

On Sunday evening, Symantec announced the acquisition of LifeLock — which provides consumer identity protection services —for $2.3 billion, or $24 a share.

This acquisition further augments Symantec’s (ticker: SYMC) Consumer Security segment, extending protection beyond just endpoint devices, covering a customer’s entire digital footprint. Given the increasing breach activity, we believe this transaction will better position Symantec as the industry’s leading consumer-security provider and should enable the highly profitable segment to return to growth. As such, we reiterate an Overweight rating and $31 price target.

Symantec announced they entered into an agreement to acquire LifeLock (LOCK) for $24 per share or $2.3 billion in enterprise value. Based on the calendar 2017 consensus revenue estimate of $747.2 million (up 12% year-over-year), the deal is valued at roughly 3.1 times sales. The transaction is expected to close in Symantec’s fiscal fourth quarter (ended March) and will be financed with cash...