McAfee Eyeing NortonLifeLock Acquisition, But ESET, Sophos Might Be Better Suitors

McAfee reportedly is interested in pursuing a merger with NortonLifeLock, previously Symantec.

However, one analyst sees little upside for McAfee and therefore doesn’t expect a NortonLifeLock-McAfee combination.

According to the Wall Street Journal, NortonLifeLock, a $16 billion consumer-software company, has attracted interest from a number of companies including rival McAfee. McAfee is owned by Intel and private-equity firms TPG and Thoma Bravo.

Private-equity firms Permira and Advent International reportedly are potential suitors for NortonLifeLock as well.

NortonLifeLock focuses on consumer and small business security products, including identity protection and privacy solutions offered under the LifeLock brand. McAfee offers both consumer and enterprise solutions.

McAfee spokesperson Jaime Le said her company doesn’t “comment on rumors or speculation.” NortonLifeLock couldn’t be reached for comment.

Symantec renamed itself NortonLifeLock after Broadcom bought its enterprise security business for $10.7 billion in cash.

Eric Parizo, senior analyst with Ovum, tells us it wouldn’t surprise him to see a sale of the former Symantec consumer business since the entire Symantec business was up for sale prior to the Broadcom acquisition.

Ovum’s Eric Parizo

“While at first glance it may seem unlikely for such an acquisition to happen so quickly after the Broadcom transaction, I think there are serious questions about the long-term viability of the consumer business as a standalone entity,” he said. “For many years prior to the LifeLock acquisition, [Symantec’s] enterprise side was propping up the steady decline on consumer revenue. LifeLock stabilized it from a revenue perspective, but it’s unclear whether consumers want a cybersecurity-identity protection offering over the long term. The motivation to explore a sale now would be to maximize the present valuation of NortonLifeLock before the underlying business issues manifest themselves.”

As far as buyers go, since it’s unclear exactly how much technology the buyer would be getting, a lot of the intellectual property is still tied to the enterprise business now owned by Broadcom, so the value would be in the customer base, as well as the identity protection and consumer intelligence business there, Parizo said.

“I think it rules out McAfee because there’s not a lot of upside there, and it rules out a lot of the endpoint detection and response (EDR) vendors like Crowdstrike or SentinelOne because I doubt they would want to make a big push into consumer,” he said. “So I think there are only going to be a limited number of potential buyers there, companies like ESET or Sophos that still see consumer as a big part of their revenue mix going forward and would be willing to pay to accelerate growth.”

Ovum’s Rik Turner

Rik Turner, principal analyst at Ovum, said NortonLifeLock has a “phenomenal” customer base, and that LifeLock was a “very savvy” acquisition by Symantec in that it was “good tech that breathed new life into the Norton brand.”

“As for competition, there are a bunch of other names out there now, from Kaspersky (still relevant in consumer), Malwarebytes and the Avast brand, plus a few national champions like Panda and F-Secure,” he said. “Even a combined NortonLifeLock/McAfee would still have its work cut out to hold them all off globally.”