Symantec Corp., the world's biggest maker of computer anti-virus products, said Monday it has agreed to buy Lindon-based Altiris Inc. for about $1.03 billion to gain programs that track corporate software use.
As part of the deal, Altiris shareholders will receive $33 a share in cash, the companies said. The purchase price includes about $200 million Altiris has on hand in cash and short-term investments.
"We're very excited about linking up with a company that has the presence and brand recognition and experience in the security space that Symantec has," said Steve Morton, Altiris vice president of product management and marketing. "We've viewed a convergence happening between systems management — which is the category that we deal with —and security, and we can't think of a better partner to do that with than Symantec."
The transaction is pending shareholder and other approvals and is expected to close during the second quarter of 2007. Symantec Chief Executive Officer John Thompson said he doesn't expect many layoffs at Altiris, which employs about 1,000 people, beyond eliminating redundant positions.
"For us, it's business as usual," Morton said. "Aside from the fact that the transaction most likely will close in the second quarter, we still have numbers to meet and products to deliver, and we'll stay very focused on that for the next few months."
Symantec technology vice president Rob Clyde said Altiris' president and chief executive will run the company's business unit.
"I think that gives you some indication for our plans for operations in Utah," Clyde said.
Spun out from KeyLabs with 12 employees in the mid-1990s, Altiris grew to include more than 1,000 employees (400 at the company's Lindon headquarters). Altiris products help clients track, install and maintain their software on desktops, laptops, servers and handheld devices.
In 2002, it became a publicly traded company, during what one Altiris official called "one of the worst IPO periods in history." However, the company's strategy of "deliberate, controlled growth" led to partnerships with Compaq, Hewlett-Packard, Dell, Microsoft and others. On Monday, the company's stock closed up nearly 20 percent at $32.55 per share.
Both Morton and Clyde said the deal was a natural fit, and a long time coming.
"We have a very strong belief that end point management is critical to our business," Clyde said. "We're strong in the security space, but it's pretty hard to have a secure end point if it's not well-managed, and that's what Altiris brings to the equation."
For Altiris, getting together with Symantec adds depth and breadth to its reach.
"I think this gives Altiris some additional markets, geographies that we can be more effective in," Morton said. "With the presence and reach of Symantec, I think that will accelerate our adoption in places like Asia Pacific and Latin America and other parts of the world. And again, we think it's something that's naturally happening in the market, where people are looking for those who not only manage but also at the same time secure their computers."
The Altiris deal is Symantec's eighth acquisition since the 2005 purchase of storage-software maker Veritas Software Corp. for $10.2 billion. Thompson has been working to diversify beyond the slowing anti-virus market as he fends off competition from Microsoft Corp., the world's biggest software maker.
Analyst reaction to the sale was mixed.
"The transaction makes sense," Adam Holt, an analyst at J.P. Morgan Securities Inc., said Monday in a note to clients, adding that Symantec "appears to be paying a fair price."
Daniel Ives, an analyst from Friedman Billings Ramsey & Co., was not so sure.
"The timing of this acquisition is not ideal," Ives said, also in a note to clients. "Another large acquisition at this juncture is a tough pill for investors to swallow."
Clyde said the timing of the transaction was driven by the "natural processes of the deal itself."
"We've been watching Altiris for many years and believe the business was at an inflection point," Clyde said. "At this point, when you're at an inflection point, you need to move.
"Our customers are what's important, and we believe that if we take care of our customers and provide what they need, in the end the market will take of itself. In the end the market will reward taking care of your customers, because your revenue goes up and everything fixes itself."
Separately Monday, Altiris said fourth- quarter sales and profit were at the upper end of its forecast, citing preliminary data. The company had predicted sales of $57 million to $61 million and earnings per share, excluding some costs, of 25 cents at the mid-point of that sales range.
For the first three quarters of fiscal 2006 ended Dec. 29, Symantec sales, including some revenue from acquired companies, rose 4.7 percent to $3.88 billion. Profit excluding some costs fell 13 percent to $754.2 million. The company said it will cut employee and other expenses to save $20 million a year.
E-mail: jnii@desnews.com
Contributing: Ville Heiskanen; Rochelle Garner