Symantec agreed to buy UK-based MessageLabs on October 8, 2008, and completed the acquisition on November 14. The deal was intended to expand Symantec’s hosted security and software-as-a-service (SaaS) capabilities by combining MessageLabs’ online messaging and web protection with Symantec’s broader security and compliance expertise. The announced price estimate and the later purchase-accounting figures describe different stages of the transaction.
What was MessageLabs?
Symantec described MessageLabs as a privately held, UK-based managed-services provider that protected, controlled, encrypted and archived electronic communications. Its hosted offerings included email, web and instant-messaging security. Rather than requiring customers to run all of these protections on their own systems, MessageLabs delivered them as managed services.
Symantec’s later filing said the acquired business’s results were included in its Security and Compliance segment from the acquisition date. That is a description of the company’s reporting at the time, not evidence that the MessageLabs brand or those services remain available today. Symantec’s fiscal 2010 Form 10-K identifies the hosted offerings and reports the acquisition accounting.
Why did Symantec buy MessageLabs?
Symantec presented the acquisition as a way to complement its SaaS business and give customers more options for security delivered both on-premise and off-premise. CEO John Thompson said, “Increasingly, our customers want choice, the opportunity to provide them an expanded set of on-premise and off-premise solutions for many of their most critical information management challenges, is truly exciting.”
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The strategic logic was to bring together capabilities that served related but distinct needs: Symantec’s data-loss prevention, compliance, archiving and endpoint-security expertise, and MessageLabs’ online email, web-security and instant-messaging expertise. In the acquisition call, management also described a simplified hosted-services portal for billing, support and application management as an intended benefit. Those comments set out the plan at announcement; they do not establish that the portal or every planned integration was later delivered. Symantec’s acquisition-call transcript records the stated rationale and plans.
When was the deal announced and completed?
- October 8, 2008: Symantec announced a definitive agreement to acquire MessageLabs.
- November 14, 2008: Symantec completed the acquisition.
At announcement, Symantec anticipated closing by the end of its fiscal third quarter of 2009. The transaction was completed before that stated target. Symantec’s October 2008 SEC filing documented the agreement and the contemporaneous expected price.
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How much did Symantec pay?
The commonly cited figures refer to different reporting stages and should not be treated as competing estimates for the same accounting measure.
| Figure | What it represents |
|---|---|
| Approximately $695 million | Announcement-stage expected cash price, based on exchange rates as of October 8, 2008, in Symantec’s contemporaneous SEC filing. |
| $640 million | Initial total purchase price, including transaction costs, reported in Symantec’s fiscal 2010 Form 10-K. |
| $10 million | Additional payment Symantec said it made to the seller after a purchase-price adjustment, also reported in the fiscal 2010 filing. |
The first number was an estimate made when the agreement was announced; the later filing gives the initial purchase-accounting amount and notes the subsequent adjustment payment. The filing does not make the announcement estimate interchangeable with the later reported figures. The October 2008 filing and the fiscal 2010 Form 10-K provide the respective bases.
What the acquisition meant—and what the record establishes
The deal illustrates Symantec’s effort in 2008 to extend security services beyond software installed and managed on customers’ own systems. MessageLabs brought hosted protection for communications, while Symantec described its own strengths in endpoint security, data-loss prevention, compliance and archiving as complementary. The fit was strategic: it broadened the types of security and delivery Symantec said it could offer.
The SEC filings establish the transaction, MessageLabs’ service categories, the segment in which Symantec included its results, and the purchase-accounting figures. The acquisition-call transcript establishes management’s rationale and its stated plans. Those sources do not, by themselves, establish the longer-term success of the integration or current availability of MessageLabs services.
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