Consistent with its strategy of expanding further, Symantec Corp. (SYMC - Analyst Report) recently announced its plans to make a tender offer to purchase all of the outstanding shares of common stock and stock rights of the renowned publicly traded company VeriSign Japan KK.
The company is expected to launch its tender offer on May 28, 2012 and expects to close the same by July 6, 2012, keeping the option of extending the same. On the successful completion of the deal, VeriSign Japan stakeholders will receive ¥44,000 (around $556.00 USD) for each share of the company. The offer is subject to the approval of a special panel appointed by the board of directors of VeriSign.
This proposed deal is the first step toward Symantec’s acquisition of Verisign in its entirety, as the former already holds a 54.0% stake in VeriSign. This acquisition is expected to create a win-win situation for both the companies as this will ultimately benefit customers, partners and shareholders by driving growth for User Authentication solutions in Japan and expanding SSL authentication services to offer companies comprehensive Website Security Solutions.
Symantec has always been active on the acquisition front. One of the most recent takeover acquisitions was that of privately-held Nukona Inc., a provider of mobile application management (MAM) services. This is an important acquisition for the information technology (IT) security major, as it will likely enhance Symantec's enterprise mobility portfolio. With Nukona’s capabilities, Symantec will be able to deliver mobile application security solutions that can run on different platforms.
With this enhancement in its enterprise mobility portfolio, Symantec will aid IT organizations to protect and isolate corporate data and applications across corporate and personal devices.
Although the Internet security market is growing steadily and offers incremental growth opportunities, smaller companies like Kaspersky and Quick Heal that have resorted to aggressive pricing to sell their innovations are a huge challenge to the company.
In our view, Symantec has delivered a modest fourth quarter with the bottom line surpassing the Zacks Consensus Estimate. Geographical and segmental performances were impressive, barring the EMEA and Service segments.
However, uncertainty over PC sales may affect its business in the upcoming quarters. Moreover, cautious tech spending by different government and private organizations, stiff competition from McAfee (acquired by Intel Corp. [(INTC - Analyst Report)]) as well as the prevailing economic turmoil in Europe will likely dampen the company’s business prospects this year.
The company has a Zacks #5 Rank, implying a short term Strong Sell rating.