Broadcom Is in Advanced Talks to Acquire Symantec

11:27 07/04/2019

Security software maker Symantec SYMC  saw big gains last week after it was reported that Broadcom AVGO  is in advanced discussions to acquire the company.

The report by Bloomberg prompted shares of Symantec to see gains of over 20% in after-hours trading when Wall Street learned the news.

Prior to the report, the company had lost about a third of its value in shares in two years.

Symantec's CEO Greg Clark had stepped down in May, saying he wanted to spend more time with his aging father. His sudden departure came after the company missed revenue estimates for the fourth quarter. Richard Hill, the company's director, is now interim president and CEO.

According to Symantec's annual report, it is the world’s biggest maker of cybersecurity software, providing products and services to more than 350,000 organizations and 50 million people.

Morgan Stanley analyst Craig Hettenbach noted, 'Broadcom’s approach to M&A is to deliver high cash on cash returns, which it has been quite successful in achieving. In semiconductors, the company was early and led the wave of consolidation seen across the industry. However, with many assets already off the board and remaining companies trading at high valuation multiples, the opportunity set in semis is much lower today.'

If the acquisition is successful, it would be the company's second big software acquisition following its $18 billion takeover of CA Technologies in 2018.

Broadcom had also tried to purchase rival chipmaker Qualcomm.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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