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VeriSign Shells Out $140M For Guardent

VeriSign's aggressive push into the managed-security services (MSS) industry took another step forward with the announcement of a $140 million deal to acquire privately held Guardent.

VeriSign, a Mountain View, Calif., firm best known for its digital commerce and communication products and services, said Guardent's MSS and consulting offerings will be folded into its security services division.

"It's a good strategic fit," VeriSign spokesman Brendan P. Lewis told internetnews.com. "We're both vendor-neutral and our customer bases complement each other."

VeriSign will keep Guardent's Waltham, Mass., headquarters and its security operations center in Providence, R.I. Customers should not notice any disruptions during the ownership change, Lewis said. Guardent's CEO Maria Cirino will become senior vice president and general manager of VeriSign Managed Security Services.

The deal has been a matter of speculation for some time. Now that it's happened, VeriSign could build momentum MSS market, Peter Kuper, an analyst at SG Cowen Securities, wrote in a research note this morning.

With Guardent, Verisign's MSS platform will have "far more heft and market relevence," Kuper said. SG Cowen also said the price was reasonable, especially compared to Symantec's purchase of its MSS provider RipTech.

While improving VeriSign's prospects, the merger doesn't immediately represent a threat to industry heavyweights like and Internet Security Services , Kuper concluded.

The financial impact also remains murky. SG Cowen estimates that Guardent has revenues of $30 million to $35 million a year and growing. VeriSign's Lewis said the deal will have no bearing on 2003 results. The company will release further information next month.

The transaction is another sign that contraction in the enterprise security space is gaining speed. Earlier today, Shavlik Technologies, a security software and services provider, acquired the technology and related assets of Gibraltar Software, a supplier of automated patch management technology for cross-platform networks.

The VeriSign deal also comes on the heels of two big acquisitions by rival Network Associates . Network Associates recently spent $120 million to gobble up intrusion-detection specialists Entercept Security Technologies and $100 million in cash to acquire IntruVert Networks.

For VeriSign, which markets Web presence, trust services, managed security and network services to high-end businesses and government agencies, the acquisition of privately-held Guardent gives it a legitimate Managed Security Service Provider (MSSP) partner with big-name clients.

VeriSign has already scored a major deal to provide managed security services to financial services powerhouse Merrill Lynch (Quote, Chart) and the company also has partnerships in place with companies like IBM (Quote, Chart), Microsoft (Quote, Chart) and RSA Security.

When Guardent deal clears regulatory approvals, expected in the first quarter next year, VeriSign said it would lead to an expanded customer base and add technologies for the lucrative vulnerability-management market.

Research firm IDC is estimating the managed security services market at $1.3 billion with growth projections through 2008. With network threats escalation from month to month, there has been a general trend among major enterprises to embrace risk assessment in a proactive setting instead of sitting back and reacting to intrusion by attackers.

That has created major business opportunities in managed security as big-name firms turn the reins over to specialized security houses instead of relying on in-house IT administrators to manage and react to attacks.