When writing the message, I was just thinking about Lookout’s revenue development after the acquisition. But indeed, F-Secure’s earnings development has been a clear disappointment relative to expectations following the acquisition. The synergies painted at the time of the deal have ultimately turned into just a distant dream. However, through the deal, the embedded security business has been built, and despite AT&T, its growth outlook is quite strong for the coming years. But looking at the big picture—that over 200 million dollars was paid for Lookout and what has been achieved with it so far—it has become really expensive, which is also reflected in F-Secure’s share price.
Even the figures right after the spin-off don’t tell the whole truth, since F-Secure was forced as an independent company to increase costs anyway to build an independent organization. It’s hard to say what F-Secure would look like on the stock exchange now if Lookout had not been acquired and they had just focused on maintaining the old Total business. Surely nice dividends could have been paid in recent years, but without the investments accelerated by Lookout, would F-Secure even be a competitive company soon in the era of artificial intelligence? Of course, we can never get the real answer to that now.
Edit. I’ll add that, in my opinion, the Lookout acquisition itself was a strategically good move. The only problem with it was the far too high purchase price paid. The valuation of the deal already felt high at the time it was made, and now, with hindsight, it feels even more unpleasant, seeing as development has fallen significantly short of the expectations at the time of the deal.