As per the deal, Blue Coat CEO Greg Clark will be at the helm of Symantec and Mike Brown will step down. Silver Lake has announced an additional investment of $500 million into Symantec, following a similar cash injection earlier this year.
Blue Coat was bought by Bain Capital from Thoma Bravo last year for $2.4 billion. Bain has also now invested $750 million in Symantec.
"Once combined, we will offer customers around the world - from large enterprises and governments to individual consumers - unrivaled threat protection and unmatched cloud security," said Clark.
The combined company would have registered $4.4 billion in revenues in fiscal year 2016, but both these companies bore the brunt of an increasingly competitive security market. Symantec made several structural changes over the last half decade in the face of increased competition from aggressive younger firms, such as Palo Alto Networks, FireEye, CrowdStrike and Cylance.
Symantec said in fourth quarter earnings report from May that it expected revenues to continue to fall across its enterprise and consumer divisions. Revenue for the quarter was $873 million, down six per cent year-on-year.
Earlier this year, Symantec exited the storage game, selling its Veritas division, originally bought for $13.5 billion in 2004, to investors led by The Carlyle Group for $7.4 billion.
On the other hand, Blue Coat faced a different kind of problem after its kit was found in blacklisted countries. Some fear the technology developed by this company could be used by repressive regimes for surveillance.