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Symantec Set to Acquire Skycure, Boosts Security Platform

Zacks

Cybersecurity firm, Symantec Corporation SYMC, recently inked a deal to acquire Skycure, an Israel-based company. However, the financial terms of the deal remained undisclosed. It is expected that the deal will close in the second quarter of fiscal 2017.

The acquisition is aimed at providing security service against mobile threats and malwares across multiple devices like Apple’s iOS, Microsoft’s Windows and Android.

Skycure is the leader in mobile threat defense (MTD), which helps in fighting unknown threats and malware attacks. The deal focuses on safeguarding mobile workers from threats and malware attacks. This in turn will help the company to generate higher business volume.

Will Symantec Aid from the Deal?


The acquisition of Skycure’s MTD will help Symantec to strengthen its enterprise and consumer mobility offering. This will also enable Symantec to help other organizations in catering to the needs of mobile workforce, aiding in secure and risk-free devices, while accessing corporate resources.

The deal is anticipated to help the company in maintaining its leadership position in Secure Web market and enhancing its capabilities in mobile protection, which is currently a major concern for almost every sector including financials, retail and technology.

According to Greg Clark, Symantec CEO, “Mobile is a core component of our strategy and the acquisition of Skycure is a major step forward in executing it. Together, we will offer the cloud generation an integrated mobile cyber defense architecture that will protect customers’ mobile devices and networks across iOS, Android and Windows.”

We believe that the acquisition will enable the company to increase its scale of operations, gain customers and enhance its technological expertise.

Need For Security

The growing usage of mobile internet has resulted in increased rate of cybercrime and theft. Last year, Symantec’s researchers revealed that there were more than 600 new vulnerabilities on iOS and Android operating systems. Mobile malware detections have doubled to 18.4 million. Thus, the demand for mobile security application has seen an upward trend, recently.

The combined solution of Skycure’s MTD with Symantec’s enterprise mobility solutions aims at solving this problem and extends safe and seamless network access to a wide range of users and devices. It will also offer a comprehensive and versatile secure mobility solution that will support the widest range of connectivity options, endpoints and platforms to meet the organization’s changing and diverse remote access need.

Bottom Line

The company's restructuring initiatives have been appreciated by investors, which is visible from its share price appreciation in the last one year. During this period, the stock returned 37.5% compared with the Zacks categorized Computer-Software industry's gain of 27.2%.

Of late, Symantec's top and bottom lines have been under pressure due to persistent weakness in PC sales and loss of market share in the data storage segment. Additionally, intense competition from Palo-Alto Networks PANW and FireEye FEYE has been eroding its market share in the enterprise segment.

As a result, the company has taken the acquisition route to redeem its struggling business. We believe that these ventures will enable Symantec to strengthen its position in the security market.

Currently, Symantec carries a Zacks Rank #2 (Buy).

Another top-ranked stock in the broader technology sector is Applied Materials, Inc. AMAT, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Materials has long-term expected earnings growth rate of 16.6%.

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