Symantec to acquire MessageLabs

Symantec announced on Wednesday that it will acquire MessageLabs for approximately $695 million in cash. The merger will add MessageLabs' email security services to Symantec's existing portfolio of security products and services. The deal is subject to regulatory approval and is expected to close before the end of the calendar year.

MessageLabs provides email and web filtering as a hosted service, reducing the quantity of spam, viruses and other unwanted messages an organisation receives. It runs its services from 14 datacentres around the globe, and is the market leader in hosted email filtering with 29 per cent of the sector, according to data from IDC. Symantec already provides packaged software and security appliances for content protection, but hasn't had the same level of success in managed content filtering services as MessageLabs.

The market for messaging security products is set to grow by 15 per cent per year, according to Symantec. Google's acquisition of MessageLabs competitor Postini last year for $635 million in cash would appear to reinforce this prediction.

MessageLabs was founded in Gloucester in 1999 by brothers Ben and Jos White, and much of the company's development work is still done in the UK. The company had revenues of $145 million last year and employs 550 people worldwide. About 63 per cent of the company's revenue comes from Europe, the Middle East and Africa. Most of its customers pay for its services using a monthly, automatically renewed subscription. The company provides service level agreement on its services, and claims to be able to block 99.4 per cent of spam and have the lowest false-positive rate in the industry.

Symantec believes that the acquisition will allow it to offer a "hybrid" model of data security, with both end-user software and managed services being used. "The email security market is one of the few security markets where all three delivery methods are avaiable, and increasingly delivered in combination" said MessageLabs chief executive Adrian Chamberlain. Symantec chief executive John Thompson added "By combining MessageLabs with our Symantec Protection Network team, we have one of the strongest portfolios of cloud-based infrastructure services and a great foundation on which to grow."

On completion of the acquisition, MessageLabs will become Symantec's new Software as a Service group, with Chamberlain running the group.

(jbe)