Not even a week after closing its split, Symantec has made its first big move, announcing Thursday a $500 million strategic investment from private equity firm Silver Lake.
In conjunction with the investment, which Symantec said it will be funneling toward an accelerated share repurchase program, Silver Lake Managing Partner Ken Hao will join Symantec's board of directors.
Partners were thrilled by the news of the investment, saying that the influence of a major private equity firm such as Silver Lake can only be a positive move for the security vendor. Silver Lake is best-known for its participation in the blockbuster move to take Dell private in October 2013.
[Related: 10 Things To Expect From Symantec In Coming Months]
"I think that will be very positive," said Wade Wyant, president and founder of ITS Partners, a Grand Rapids, Mich.-based Symantec partner. "It can't hurt to have … more people invested in Symantec's success. I'm excited about it."
Jason Eberhardt, vice president of strategic alliances at Chicago-based Conventus, a longtime Symantec partner, said in an email that he saw the investment as a "validation" of the company's strategy and leadership direction.
"I am very excited about this news, and I know it is just the beginning of great things we will see from Symantec," Eberhardt said.
Steve Barone, CEO at CBI, a Ferndale, Mich.-based Symantec partner, called the move a "vote of confidence" in Symantec from a "proven investment group."
"[The investment] means they see what I see: a revitalized Symantec with great leaders in place, a laser-like focus on security and execution against their plan like I've never seen before. Soon, you are going to hear about some great things coming to market from Symantec," Barone said in an email.
News of the investment came in time for the security vendor's third quarter earnings. Symantec reported revenues for the quarter of $909 million, down 6 percent year over year. It reported earnings of $172 million, down 25 percent from $228 million in the third quarter of last year.
On Symantec's third fiscal quarter earnings call, CEO Michael Brown said the Silver Lake investment is a validation of the company’s three-year transformative journey, most notably with its split from storage company Veritas, but also including growing its enterprise security business, improved cost structure, revamping its executive team and returning cash to shareholders.
’It is a strong vote of confidence in both our transformation as well as our future as the world leader in security,’ Brown said.
Brown said Silver Lake will also prove helpful as Symantec evaluates possible acquisition opportunities, hinting at a smaller "judicious" purchase, rather than a blockbuster buy.
Martin Wolf, president of martinwolf M&A Advisors of Walnut Creek, Calif., one of the top channel investment advisory deal makers, called the Silver Lake deal a "brilliant" move by Symantec.
"If you are in the Symantec ecosystem, this should put a little color in your cheeks," he said. "Silver Lake can make a meaningful difference. They are smart money. They will clearly focus their time and investment in areas where Symantec has a competitive advantage -- not based on legacy, but rather the future prospects and opportunities. They are not beholden to the legacy issues. It is a question of where does Symantec want to go and how does it get there successfully."
Wolf also applauded the appointment of Silver Lake Managing Partner Ken Hao to the Symantec board. "Silver Lake is like the Yankees' Murderers' Row. Putting Hao on the board is like adding any of the first six batters from the 1927 Yankees. Take your pick."
Partners said they were glad to see Symantec pick up a private equity investment, such as Silver Lake, rather than a purchase from a large vendor.
"Some large company like Cisco or HP purchasing Symantec isn't as appealing as an outside investment company making this type of transaction," ITS Partners' Wyant said.
Bob Venero, CEO of Holbrook, N.Y.-based solution provider Future Tech, No. 232 on the 2015 CRN Solution Provider 500, said he sees the Silver Lake investment and participation driving a sharper focus on the enterprise security market.
"You have to look at the goals of Silver Lake," he said. "They have just invested a half billion dollars. I am sure they have a mindset on what they want to accomplish. If you look at the growth opportunities, it is absolutely in enterprise security. If I was a betting man, that is where I would be putting my money."
Venero, whose company is a longtime Symantec partner, said the security software provider has struggled to break beyond its consumer anti-virus heritage. "They have to dispel the myth that they are just an anti-virus company and show they are truly a player in the Fortune 1000 security market," he said. "The reason they have struggled with that in my mind is because of the breadth of the offerings they have."
The Silver Lake investment is sure to get more partners to take a closer look at Symantec, said Venero. "Whenever you get an investment from an organization like Silver Lake, as a partner you have to take a second look at the direction that the company is going," he said. "Partners need to have their eyes wide open and need to take a look at what transitions Silver Lake brings to Symantec."
related stories
Video
trending stories
sponsored resources

Trend Micro
Managed Security 360

HubStor
Cloud Backup 360

Cysurance
Cyber Insurance 360

Tenable
Cyber Risk 360

Products of the Year Showcase

Dell Technologies
Dell Technologies Cloud Learning Center

Bitdefender
Cybersecurity 360

EPOS
EPOS

Fujifilm
Fujifilm

Application Integration 360

Mimecast
Mimecast

Comcast
Comcast Business Learning Center

Dell Technologies
Dell Technologies Server Learning Center

WatchGuard
WatchGuard

Hitachi Vantara
Hitachi Vantara

Dell Technologies
Dell Technologies Storage Learning Center

Carbonite
Cloud Storage 360

Sophos
Sophos Cybersecurity Learning Center

Webroot
Webroot Learning Center

BlackBerry
BlackBerry Learning Center

NPD
Industry Trends 360

Symantec
Symantec Business Security Learning Center

Veeam
Veeam

Channel Chief Showcase

Acer
Remote Workforce 360

Sherweb
Sherweb

APC by Schneider Electric
Digital Services for Edge Learning Center

VMware

StorageCraft
Disaster Recovery Learning Center

Vertiv
Edge Computing Learning Center

Wasabi
Wasabi

Dell Technologies
Dell Technologies Hybrid Cloud Learning Center

Cradlepoint
5g for Business 360

eSentire
Managed Detection and Response 360

Comm100
Industry Trends 360
