An 'Affinity Acquisition,' As LANDesk Picks Up Divested Shavlik Division

Includes: VMW
by: 451 Research: Inorganic Growth

By Brenon Daly

As a company that has been cast off twice from its larger corporate owners, LANDesk Software might have a special affinity for its latest transaction: the acquisition of Shavlik Technologies, which is being cast off by VMware (NYSE:VMW). The deal adds Shavlik's technology for managing and securing physical and virtual environments to the systems management vendor's portfolio. Inside VMware, Shavlik was known as VMware Protect; under LANDesk, the business is called Shavlik Protect.

LANDesk's purchase effectively unwinds VMware's acquisition of the security company in mid-2011. At the time, we estimated that the virtualization giant paid about 3x sales for Shavlik. We understand that today's deal went off at a more representative multiple for divestitures. That said, Shavlik, which never took any outside funding, is known to generate healthy cash flow.

The purchase of the carved-out business represents the third deal LANDesk has done since private equity firm Thoma Bravo carved the company itself out of Emerson Electric (NYSE:EMR) in August 2010. (That transaction came almost exactly eight years after another private equity shop, Vector Capital, carved LANDesk out of Intel (NASDAQ:INTC).) On the other side, VMware's sale of Shavlik is its second divestiture announced in 2013, as the virtualization giant works through a previously announced restructuring.