MessageLabs, a UK-based security services provider with backing from Madison Dearborn and Catalyst Investors, has sold to Symantec Corp for $695 million. The company raised at least $58.9 million in funding, including $36 million from Catalyst and Madison Dearborn in 2000.
Symantec Corp. (NASDAQ: SYMC) today announced it has signed a definitive agreement to acquire MessageLabs, a leading provider of online messaging and Web security services. Under the terms of the agreement, Symantec will acquire MessageLabs for a purchase price of approximately $695 million in cash, subject to foreign currency adjustments, payable in approximately £310 million Pounds Sterling and $154 million US Dollars. MessageLabs generated approximately $145 million in revenue during fiscal year 2008, ending July 31, 2008 and grew by more than 20 percent over the prior fiscal year. The agreement is subject to customary closing conditions including regulatory approvals, and is expected to close by the end of the 2008 calendar year.
With the acquisition of MessageLabs, Symantec gains a leadership position in the rapidly growing Software-as-a-Service (SaaS) segment and strengthens its lead in the messaging security market. MessageLabs is the number-one provider of online messaging security worldwide with more than eight million end users at more than 19,000 clients ranging from small business to the Fortune 500. Symantec will capitalize on cross-selling and up-selling its existing SaaS offerings of backup, storage and online remote access into the MessageLabs customer base. And future SaaS offerings, leveraging Symantec technology in data loss prevention, compliance, endpoint security and archiving, will be enhanced by MessageLabs’ expertise in SaaS sales, operations and support.
“MessageLabs extends our investments in the Software-as-a Service segment and will allow us to offer our customers unprecedented choice from a single provider of message security solutions,” said John W. Thompson, chairman and chief executive officer, Symantec. “By combining MessageLabs with our Symantec Protection Network team, we have one of the strongest portfolios of cloud-based infrastructure services and a great foundation on which to grow.”
By combining MessageLabs’ deep expertise in the SaaS market with Symantec’s rich portfolio of technologies, Symantec will be able to offer a broad portfolio of online service to secure and manage information. By bringing together two industry leaders, Symantec significantly expands its messaging security market leadership. In addition, Symantec will provide the broadest range of offerings in the messaging security market including software, appliance and hosted services.
“Symantec and MessageLabs have a common belief in the benefits of in-the-cloud services and how they enable customers to be protected from threats and enforce policy,” said Adrian Chamberlain, chief executive officer, MessageLabs. “MessageLabs’ services help ensure that only safe and appropriate information enters and leaves the organization. Together, with Symantec, we can set a roadmap for the future of online services.”
This acquisition also continues the momentum of the Symantec Protection Network, the Symantec SaaS platform. By combining MessageLabs and Symantec Protection Network, customers will benefit from access to a greater number of SaaS offerings on one easy-to-use portal and the opportunity to purchase through a broader network of partners in more locations around the world. MessageLabs customers will now have access to Symantec Protection Network offerings through MessageLabs’ established SaaS go-to-market model. Symantec’s proven small-and-medium and enterprise channel program will expand the global access to MessageLabs offerings.
MessageLabs’ established suite of online services for messaging and web security provide additional, complementary offerings to those already available on the Symantec Protection Network platform which includes Online Backup, Online Storage for Backup Exec and Online Remote Access. MessageLabs’ 14 worldwide data centers and significant expertise in SaaS sales, operations and support will also allow for future international expansion of current Symantec Protection Network services.
MessageLabs plus Symantec Protection Network will result in the creation of a new Symantec Software-as-a-Service product group to accelerate the development of new SaaS solutions and hybrid offerings for IT professionals. SaaS is described as one of the most impactful trends in software with a current estimated market size of $5.71 billion (in 2007) reaching $16.98 billion by 2012, representing 24.4 percent CAGR according to IDC(1). For more information on how MessageLabs will complement Symantec in the delivery of SaaS offerings please visit: http://go.symantec.com/MessageLabs
Webcast and Conference Call Information
Symantec will host a conference call and webcast today to discuss the acquisition at 5 a.m. PDT/ 8 a.m. EDT/ 1 p.m. GMT+1. The live discussion can be accessed by dialing 888-253-4037 domestic and 719-867-0591 internationally, passcode 460686. An audio webcast of the call will also be available at www.symantec.com/invest. Please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. A replay of the call will be available via webcast at www.symantec.com/invest.
MessageLabs is a leading provider of integrated messaging and web security services, with more than 19,000 clients ranging from small business to the Fortune 500 located in more than 86 countries. MessageLabs provides a range of managed security services to protect, control, encrypt and archive communications across email, web and instant messaging. These services are delivered by MessageLabs globally distributed infrastructure and supported 24/7 by security experts. This provides a convenient and cost-effective solution for managing and reducing risk and providing certainty in the exchange of business information. MessageLabs main shareholders include the founders Ben and Jos White, Catalyst Investors and Prospect Investment Management. For more information, please visit www.MessageLabs.com.
Symantec is a global leader in providing security, storage and systems management solutions to help businesses and consumers secure and manage their information. Headquartered in Cupertino, Calif., Symantec has operations in more than 40 countries. More information is available at www.symantec.com
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This press release contains forward-looking statements within the meaning of U.S. federal securities laws, including expectations regarding the closing of Symantec’s acquisition of Message Labs and the integration of its products and technologies into Symantec’s products and solutions, that involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied in this press release. Such risk factors include, among others, satisfaction of closing conditions to the transaction, our ability to successfully integrate the acquired businesses and technologies, and customer demand for the technologies and integrated product offerings. Actual results may differ materially from those contained in the forward-looking statements contained in this press release. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantec’s Annual Report on Form 10-K for the fiscal year ended March 28, 2008. Symantec assumes no obligation to update any forward-looking statement contained in this press release.