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Peter A. Sokoloff & Co. regularly analyzes transactions which occur within the industries covered. An archive of these case studies is kept online as a courtesy to our colleagues. To receive by e-mail new case studies as they are prepared, please e-mail bwalko@sokoloffco.com with your contact information.

Archives > Transaction Case Study 20

Symantec Corporation to acquire Altiris, Inc.

Dear Colleague,

On January 29, 2007, Symantec Corp. (Nasdaq: SYMC) announced a definitive agreement to acquire Altiris, Inc. (Nasdaq: ATRS), a provider of IT management software that enables businesses to manage and service network-based endpoints – from mobile devices, laptops, and desktops to servers and storage assets.

Under the terms of the agreement, Altiris stockholders will receive $33 cash per share, resulting in a transaction value of approximately $830 million net-of-cash-acquired. The transaction is subject to customary closing conditions including regulatory and Altiris stockholder approvals, and is expected to close in the second calendar quarter of 2007.

Altiris of Lindon, Utah, with 878 employees, has revenues of $214.59 million (ttm) with EBITDA of $36.14 million (ttm). They have cash of $177.45 million. The transaction (net of cash acquired) reflects 3.87x revenue and 22.97x EBITDA. The $33 per share price was a 21.6% premium over the $27.14 price at the opening bell the day of the announcement

In preliminary results for the fourth quarter, Altiris said it expects revenue of between $57 million to $61 million and earnings of 25 cents a share. Top line growth compared to Q4 last year will thus be in a range of 25%-34%. Factoring in the acquisition value, forward P/E for ATRS is about 28.

Symantec with revenue of over $5 billion (ttm) helps businesses protect their endpoints with security, compliance, and backup and recovery solutions for mobile devices and PCs to servers and storage assets with their headquarters in Cupertino, California. They have 16,000 employees worldwide.

The transaction is expected to be slightly dilutive at closing. James Socas, Symantec's senior vice president of corporate development, said the acquisition of Altiris "has a timing that's independent of any earnings announcement." Socas said the rationale for the deal is "about focusing our business, and while one side of the income statement is the cost side, the other side is revenue, and this is an important step for us on that top line."

Symantec’s acquisition of Altiris should bolster its position and leverage its strengths on the enterprise endpoint. With the Altiris solutions, Symantec anticipates helping customers better manage and enforce security policies at the endpoint, identify and protect against threats, and repair and service assets.

“The most secure endpoint is a well-managed endpoint. The best protection must be complemented by the ability to remediate and address vulnerabilities that could be exploited,” said John W. Thompson, chairman and chief executive officer, Symantec. “By combining the endpoint management solutions from Altiris with the security expertise from Symantec, we believe we can offer customers a more comprehensive solution to protect and manage the millions of connected devices that make up the fabric of today’s global IT infrastructure.”

“Today’s IT departments are faced with constant pressures to manage spiraling IT complexity at the lowest possible cost. We have made it our goal to help businesses reduce the cost and complexity of IT, improve system and data security, and better align IT service with corporate objectives,” said Greg Butterfield, president and chief executive officer, Altiris. “By combining our software solutions, services, and channel distribution strengths, Symantec and Altiris can offer our customers the 'total package' in endpoint management.”

We hope that you find this feature from Sokoloff & Co. interesting, informative and useful.  We welcome your comments and suggestions.

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