Symantec buys SecurityFocus, Riptech, Recourse
So that's who's got the cashflow...
Symantec Corp yesterday said it will spend $355m to buy three privately held security companies, following a fiscal first quarter in which it turned a loss into a profit on sales up almost 40%. Riptech Inc, Recourse Technologies Inc and SecurityFocus Inc will all help beef up Symantec's intrusion detection and warning portfolio.
For the three months to June 30, the Cupertino, California-based firm best known for its anti-virus software said it recorded net income of $56.6m, compared to a loss of $21.2m a year ago, on revenue up 39% at $316m. At the pro forma level, excluding one-time charges, the net income was $65.6m, compared to $33.9m a year ago.
Symantec's consumer business saw a whopping 90% sales growth over last year, tempered somewhat by a more modest 35% growth in its enterprise security segment and a 6% decline in its enterprise administration segment. Consumer sales account for 39% of revenue, enterprise security represents 42% and enterprise administration the balance.
The company does not expect the massive growth in its consumer segment - driven largely by a 133% increase in sales of anti-virus products - to continue. Symantec is now looking at aggressively targeting the managed security services sector, in which the systems of large enterprises are monitored for human and automated internet threats.
Symantec will buy Riptech, based in Alexandria, Virginia, for $145m cash, gaining a customer base of 500 companies in 30 countries and a number of network operations centers in the US, Europe and Asia. Riptech provides security consulting and network monitoring services for 55 of the Fortune 500 companies.
On the technology side, Symantec will pay $135m cash for Recourse, which makes ManHunt, an intrusion detection system based on packet analysis that Symantec will combine with its own Intruder Alert, and ManTrap, a "honey pot" system for trapping hackers in unprotected false systems to observe their behavior.
Finally, Symantec will also acquire SecurityFocus, which maintains a database of known threats and a community-based threat alert system - the famous BugTraq mailing list. Symantec will keep the SecurityFocus brand and will continue to license the vulnerability database to third software makers and service providers.