Website security company Symantec (NASDAQ:$SYMC) has just announced that it is planning to sell its SSL business to its competition, DigiCert (traded privately). The SSL business is reportedly being sold for an upfront cash payment of $950 million, as well as a 30% ownership in DigiCert’s stock.
Symantec had been the third largest SSL provider, with a 14% market share and its SSL certificates operating on 5.5% of domains on the Internet. Meanwhile, DigiCert had been the sixth biggest SSL provider with a 2.2% market share and its SSL certificates operating on only 0.9% of domains on the Internet. As such, DigiCert’s acquisition of Symantec’s SSL business will no doubt give DigiCert a much needed boost in rising as an SSL provider.
Symantec to Sell Business Due to Google Penalties
Symantec’s decision to sell its SSL business comes after Google’s (NASDAQ:$GOOGL) decision to implement a number of sanctions on Symantec’s SSL certificates. The sanctions were made after Google, along with Mozilla (traded privately), found out that Symantec had issued more than 30,000 SSL certificates to the wrong people/individuals. Google had planned to remove trust in all the SSL certificates Symantec had ever given out by 2018.
Google also provided Symantec with the option to stay on the SSL market. However, the company will have to provide its SSL certificates through a third-party provider beginning December 1, 2017.
Symantec Could Rebuild, But Took the Easy Way Out
Instead of facing the penalties and then attempting to turn its SSL business back around, Symantec has sold the business instead. This may affect how investors or analysts view the company and its management. It could also affect Symantec as a whole – this can be seen in how Comodo, another one of Symantec’s competitors, seemed quite happy about Symantec’s decision to sell its SSL business.
However, Symantec could continue to do well. The company previously acquired Blue Coat (enterprise products) for $4.65 billion and LifeLock (consumer security products) for $2.3 billion. Besides its SSL business, Symantec also sold its Veritas (data storage) business for $7.4 billion.
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