The $24 per-share agreement, which was approved by both companies’ boards of directors, represents a 15.6% premium over LOCK’s Friday closing price of $20.75. The deal is still subject to approval by LifeLock shareholders, but is expected to close in the first quarter of 2017.
Symantec commented via press release:
By offering each of the company’s respective customer bases a broader digital safety solution, Symantec expects to achieve additional revenue upside through higher ASPs and improved retention rates.
Symantec expects to finance the transaction with cash on the balance sheet and $750 million of new debt. Symantec’s board of directors has also increased the company’s share repurchase authorization from approximately $800 million to $1.3 billion, with up to $500 million in repurchases targeted by the end of fiscal 2017.
SYMC also reaffirmed its first quarter and full-year earnings estimates this morning, noting the transaction won’t be accretive until fiscal 2018.
Symantec shares were unchanged in premarket trading Monday at $23.75. Year-to-date, SYMC has gained 13.1%, nearly doubling the performance of the benchmark S&P 500 index during the same period.
Meanwhile, LifeLock shares, which had surged 44.6% year-to-date prior to today’s deal announcement, surged another 14% in premarket trading Monday morning.