Symantec announced it has signed a definitive agreement to acquire MessageLabs, a leading provider of online messaging and Web security services.

Under the terms of the agreement, Symantec will acquire MessageLabs for a purchase price of approximately $695 million in cash, subject to foreign currency adjustments, payable in approximately £310 million Pounds Sterling and $154 million US Dollars. MessageLabs generated approximately $145 million in revenue during fiscal year 2008, ending July 31, 2008 and grew by more than 20 percent over the prior fiscal year. The agreement is subject to customary closing conditions including regulatory approvals, and is expected to close by the end of the 2008 calendar year.

With the acquisition of MessageLabs, Symantec gains a leadership position in the rapidly growing Software-as-a-Service (SaaS) segment and strengthens its lead in the messaging security market. MessageLabs is the number-one provider of online messaging security worldwide with more than eight million end users at more than 19,000 clients ranging from small business to the Fortune 500.

Symantec will capitalize on cross-selling and up-selling its existing SaaS offerings of backup, storage and online remote access into the MessageLabs customer base. And future SaaS offerings, leveraging Symantec technology in data loss prevention, compliance, endpoint security and archiving, will be enhanced by MessageLabs’ expertise in SaaS sales, operations and support.

“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, chairman and chief executive officer, Symantec. “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.”

By combining MessageLabs’ deep expertise in the SaaS market with Symantec’s rich portfolio of technologies, Symantec will be able to offer a broad portfolio of online service to secure and manage information. By bringing together two industry leaders, Symantec significantly expands its messaging security market leadership. In addition, Symantec will provide the broadest range of offerings in the messaging security market including software, appliance and hosted services.

“Symantec and MessageLabs have a common belief in the benefits of in-the-cloud services and how they enable customers to be protected from threats and enforce policy,” said Adrian Chamberlain, chief executive officer, MessageLabs. “MessageLabs’ services help ensure that only safe and appropriate information enters and leaves the organization. Together, with Symantec, we can set a roadmap for the future of online services.”

This acquisition also continues the momentum of the Symantec Protection Network, the Symantec SaaS platform. By combining MessageLabs and Symantec Protection Network, customers will benefit from access to a greater number of SaaS offerings on one easy-to-use portal and the opportunity to purchase through a broader network of partners in more locations around the world. MessageLabs customers will now have access to Symantec Protection Network offerings through MessageLabs’ established SaaS go-to-market model. Symantec’s proven small-and-medium and enterprise channel program will expand the global access to MessageLabs offerings.