Symantec just paid $4.65 billion for Blue Coat before it could IPO

Blue Coat being acquired by Symantec

Cyber security firm Blue Coat was supposed to launch its IPO in 2016. Instead, the company has been acquired by Symantec for $4.65 billion.

The move will give Symantec the opportunity to beef up its enterprise security business.

Blue Coat helps protects companies’ web gateways from cyber attacks, a service that will complement Symantec’s existing offerings for large corporations such as email and endpoint security, Symantec executives said on on Sunday.

“Blue Coat brings capabilities from the web and for network-born threats, which combined with what we already offer will provide better protection for our customers,” said Ajei Gopal, Symantec’s interim president and chief operating officer.

Symantec is best known for its Norton antivirus software but has been undergoing some major changes in recent years. The company sold its data storage unit, Veritas, for $7.4 billion in January. That move was meant to free up cash that would allow Symantec to focus on its core security software business.

Chief Financial Officer Thomas Seifert said Symantec had been eyeing Blue Coat for a while and wanted to wait to have the separation of the Veritas unit before the company made a move.

With the purchase, 62% of Symantec’s revenue will now come from enterprise security, and it will be better positioned to compete with security players such as Palo Alto Networks, FireEye, and Check Point. The $4.4 billion in combined revenue.

The companies will merge to offer $4.4 billion in combined revenue.

Blue Coat CEO Greg Clark becoming Symantec’s CEO. Symantec’s previous CEO, Michael Brown, left in April.

Private equity firm Bain Capital acquired Blue Coat Systems Inc from fellow private-equity firm Thoma Bravo LLC for $2.4 billion last year.

“We enjoyed a very productive partnership, and are excited to be a significant investor in the future of Symantec as the leading cyber security Company in the world,” Bain managing director David Humphrey said in a statement.

Humphrey will join Symantec’s board as the firm agreed to invest $750 million in convertible notes.

Private-equity firm Silver Lake Partners has also agreed to invest $500 million in convertible notes of Symantec, which doubles its investment in Symantec to $1 billion.