Symantec (SYMC) Debuts On Takeover Targets List
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Symantec Corporation (Nasdaq: SYMC) debuted today at number 17 on StreetInsider.com's editorially reviewed 'Top 50 Takeover Targets' list at M&A Central, a one-spot-stop for M&A data.
The addition follows yesterday's takeover of rival McAfee (NYSE: MFE) by Intel (Nasdaq: INTC), which has clearly put Symantec "in play."
A takeover scenario is supported by a cheap valuation of about 10x FY11 EPS consensus, sector consolidation, and strong investor/analyst rationale behind a possible deal.
Today UBS upgraded SYMC from Neutral to Buy and called the MFE/INTC deal a "game changer."
UBS notes SYMC trades at 1.5x EV/revs, a 50% discount to where Intel valued MFE. Now SYMC management will be under pressure to unlock the unrecognized value in its own business with a possible avenue through storage asset sales, according to the firm.
If valuation remains near the 5-year lows, the probability that a strategic buyer like Oracle (Nasdaq: ORCL), IBM (NYSE: IBM), Cisco (Nasdaq: CSCO), or HP (NYSE: HPQ) buys the company increases. The firm said SYMC could be worth $20/share to a strategic buyer.
In addition to a possible takeover, UBS said the Intel/MFE should benefit SYMC’s organic business in 3 meaningful ways: 1. MFE will likely become less aggressive on pricing; 2. enterprise customers will increasingly choose SYMC as a safe-haven with MFE’s M&A uncertainty; 3. M&A distractions could see MFE take their eye off the execution ball.
Buying stocks on M&A speculation is very risky, so do your own due diligence.
Keep tabs on all the market M&A action at StreetInsider.com's M&A Central.
The addition follows yesterday's takeover of rival McAfee (NYSE: MFE) by Intel (Nasdaq: INTC), which has clearly put Symantec "in play."
A takeover scenario is supported by a cheap valuation of about 10x FY11 EPS consensus, sector consolidation, and strong investor/analyst rationale behind a possible deal.
Today UBS upgraded SYMC from Neutral to Buy and called the MFE/INTC deal a "game changer."
UBS notes SYMC trades at 1.5x EV/revs, a 50% discount to where Intel valued MFE. Now SYMC management will be under pressure to unlock the unrecognized value in its own business with a possible avenue through storage asset sales, according to the firm.
If valuation remains near the 5-year lows, the probability that a strategic buyer like Oracle (Nasdaq: ORCL), IBM (NYSE: IBM), Cisco (Nasdaq: CSCO), or HP (NYSE: HPQ) buys the company increases. The firm said SYMC could be worth $20/share to a strategic buyer.
In addition to a possible takeover, UBS said the Intel/MFE should benefit SYMC’s organic business in 3 meaningful ways: 1. MFE will likely become less aggressive on pricing; 2. enterprise customers will increasingly choose SYMC as a safe-haven with MFE’s M&A uncertainty; 3. M&A distractions could see MFE take their eye off the execution ball.
Buying stocks on M&A speculation is very risky, so do your own due diligence.
Keep tabs on all the market M&A action at StreetInsider.com's M&A Central.
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