Update: More details included to show LifeLock’s multiple run-ins with the FTC. The identity theft protection firm has been charged with multiple penalties for false advertising over the years.
Prominent antivirus developer Symantec has confirmed its intention to acquire LifeLock, an identity theft protection company for $2. 3 billion.
With 4.4 million customers, LifeLock provides identity theft protection for consumers and also provides businesses with credit and risk assessments.
Symantec chief executive Greg Clark sees the acquisition as a necessity in the face of a sluggish PC market for the traditional software maker.
In an interview with PCR, he said:
Norton had been declining with the declines in the PC market share. This acquisition brings $660 million in revenue to the consumer business and returns it to longer sustainable growth.
The deal can also be seen as Symantec’s move to expand its portfolio beyond the antivirus market. The acquisition will signal Symantec’s move to integrate the LifeLock product with its antivirus business, in an effort to provide a single product line expected to launch early next year, according to the Wall Street Journal. Following the acquisition, the board of directors at Symantec have increased the company’s share repurchase authorization form from $800 million to $1.3 billion, with up to $500 million in repurchases, a target for the end of 2017.
LifeLock shares will be valued at $24 with the deal, a %16 premium over its Friday price of $20.75, which in itself is close to its 52-week high.
To this, LifeLock CEO Hilary Schneider stated:
After a thorough review of a broad range of alternatives, our board of directors unanimously concluded that Symantec is the ideal strategic partner for LifeLock, and offers our shareholders a significant premium for their investment, at closing.
Arizona-based LifeLock offers services including monitoring new account openings and other credit-related applications to alert consumers in the event of an unauthorized use of their identity. The firm also liaisons with merchants, credits and government agencies alike to address and remediate a scenario of an identity theft attack. With 855 employees as of October 31, 2016, LifeLock also has offices in San Diego, San Francisco and Mountain view., California.
Meanwhile, LifeLock has frequently been accused of falsely advertising its services, claiming to deliver more than what its service actually can.
“While LifeLock promised consumers complete protection against all types of identity theft, in truth, the protection it actually provided left enough holes that you could drive a truck through it,” said FTC Chairman Jon Leibowitz in 2010. LifeLock agreed to pay $12 to settle FTC charges, one of the largest settlements at the time.
LifeLock did not learn, seemingly, as the FTC charged the cybersecurity firm once again for false advertising in July 2015. This time, LifeLock agreed to pay a staggering $100 million in settlement for violating the 2010 federal court order. The eye-watering sum is the largest monetary sum acquired by the FTC as a result of an enforcement action.
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