Symantec: acquisition machine
We have used the term "acquisition machine" to describe a growing set of companies for which mergers and acquisitions are not one-time strategies but rather a steady and predictable component of operations. Such companies make four or more acquisitions per year, and negotiating for and integrating these transactions takes a major part of upper management's time and energy.
These are companies that have figured that internal R&D and organic operational growth cannot begin to match the results that come from buying other, smaller firms. It's especially the case in technology, where lots of little companies with one good idea are collected by a bigger company with an established brand and sales channel.
We've pointed out how software utility giant Symantec has built its security holdings by an aggressive set of acquisitions over the past few years. But the company has a striking record of buying and integrating other software firms. One source reckons the company's growth at around 30% a year, much of that fueled by acquisitions.
The most recent ones have been the buyout of Sygate and WholeSecurity. The pattern has been for Symantec to buy an average of three or four firms per year this century. Most of the purchased companies are privately held, and the payments have no often been privately held.
The recent merger with near-equal Veritas, Veritas, the enterprise storage and backup giant ($13.5 billion), was a different kind of deal. But Veritas itself had grown by just such purchases in recent years.
According to an online article at Java.sys-con.com ("Analysis: Symantec Buys Veritas, Still Has Acquisition Itch"), that major deal moved Symantec into one of the top three software companies, beating out a company that had followed a similar strategy of constant acquisition. As the article notes:
the Symantec-Veritas combine already noses out rival CA as the fourth-largest software company in the world behind Microsoft, Oracle and SAP. Both Veritas and Symantec do about $2 billion a year and together are promising to produce 18% growth and $5 billion in revenues, 75% from the enterprise side and 25% from the consumer side. CA does about $3.4 billion. CA, which is losing share in all its markets, is thought to be a poor takeover target despite the consolidation craze because of the novel deferred prosecution deal it cut with the government to stay out of jail.
The article also notes that Symantec is still very much shopping for new buys, and not just $100 million and $200 million deals:
To do so they say Symantec CEO John W. Thompson plans to acquire other companies beyond Symantec. Sources name Mercury Interactive, Compuware and Novell in that order.
Symantec and Veritas deals
2005
Sygate network access security
BindView Development IT security compliance software
WholeSecurity anti-crimeware
XtreamLok an Australia-based antipiracy and software licensing tools developer
DataStream Technologies a Belgian archiving software company (acquired by Veritas)
2004
Platform Logic host intrusion detection software
@stake corporate digital security consultant
LIRIC Associates UK=based network security consultant
Kvault Software Limited e-mail archiving software (acquired by Veritas)
TurnTide antispam software
Invio Software IT process automation software (acquired by Veritas)
Brightmail antispam software
ON Technology enterprise infrastructure management software
Ejasent application visualization software (acquired by Veritas)
2003
PowerQuest server management software
SafeWeb secure remote access software
2002
RipTech security monitoring
Recourse Technologies security attack trackback
SecurityFocus network intrusion alert software
Mountain Wave network intrusion alert software
