Security software developer Symantec watched its stock fall 12 3/16, or 19 percent, to 51 1/2 Thursday after announcing it will pony up $975 million in stock to acquire AXENT Technologies.
AXENT (Nasdaq: AXNT) shares rallied up 5 3/4, or 30 percent, to 24 13/16 on the news.
"Today's announcement is a major step forward in aggressively implementing our enterprise strategy," said CEO John Thompson in a prepared release. "Together we will span the needs of all customers from emerging businesses to the largest enterprises. We expect the combination to deliver robust revenue growth over the next several years."
Symantec officials said it expects the deal to boost its total sales by 20 percent in fiscal 2001, 27 percent in fiscal 2002 and 30 percent in fiscal 2003.
Under terms of the deal, AXENT shareholders to receive 0.50 share of Symantec for each AXENT share. Based on Symantec's closing price of $63.69 Wednesday, the transaction values AXENT shares at $31.84 each, well above the 19 1/16 it closed at Wednesday.
Symantec said it will issue about 15.3 million common shares to AXENT shareholders to complete the deal. The merger is expected to close by the end of the year.
In its latest quarter, Symantec easily topped analysts' estimates, earning $43 million, or 67 cents a share, on sales of $191.4 million.
First Call Corp. consensus expects it to earn 65 cents a share in its second quarter and $2.73 a share in the fiscal year.
Its shares moved up to a 52-week high of 81 5/8 in March after falling to a low of 25 3/8 last July.
All seven analysts following the stock rate it either a "buy" or "strong buy."
Reuters contributed to this report.