Symantec Purchases Security Vendor MessageLabs to Build Out SAAS Business

Symantec has agreed to buy MessageLabs for roughly $695 million. The purchase is aimed at expanding Symantec's software-as-a-service business. Founded in 1999, MessageLabs specializes in Web and messaging security.

Download the authoritative guide: The Ultimate Guide to IT Security Vendors

Symantec has agreed to acquire MessageLabs in a bid to capitalize on the latter's security software-as-a-service business.

Under the terms of the deal, Symantec gets MessageLabs for approximately $695 million in cash. MessageLabs is a leading SAAS provider of messaging and Web security. According to Symantec, the plan is to capitalize on cross-selling and up-selling its existing backup, online remote access and storage SAAS offerings to MessageLabs' customer base.

Economic woes are unlikely to slow acquisitions among IT security companies. Click here to read more.

"MessageLabs extends our investments in the software-as-a-service segment and will allow us to offer our customers unprecedented choice from a single provider of message security solutions," said John W. Thompson, CEO of Symantec, in a statement. "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."

The combination of MessageLabs and the Symantec Protection Network-Symantec's SAAS platform-will result in the creation of a new Symantec software-as-a-service product group to speed the development of new SAAS solutions and hybrid offerings, officials said.

MessageLabs posted about $145 million in revenue during its fiscal year 2008, growing by more than 20 percent over the prior fiscal year. The acquisition is expected to close by the end of the calendar year.