Network Associates Continues Buying Spree

Network Associates (NAI) Friday said it has inked a deal to purchase its second start-up security software company in a week.

The Santa Clara, Calif.-based company which owns the McAfee brand said it will spend $120 million for Entercept Security Technologies. The San Jose, Calif.-based firm (formerly known as ClickNet) specializes in host-based intrusion prevention software.

In a post on its Web site, Entercept said NAI would be absorbing its assets without fundamentally changing the product. The company said its technology will become part of the McAfee business unit. NAI said it expects to finalize the acquisition within the next 45 days.

The only foreseeable holdup to the acquisition is an investigation by the U.S. Justice Department into NAI’s earnings statements spanning a period of three-years.

“This acquisition builds on our intrusion protection vision and is a perfect complement to our acquisition of IntruVert Networks, which provides network-based intrusion protection. With the Entercept technology, we now have proven technology to protect our customers’ servers, databases and applications,” NAI executive vice president of corporate development and strategic research Sandra England said in a statement.

This is the second major purchase that NAI has made this week. On Tuesday, the company said it will spend $100 million in cash to acquire IntruVert Networks.

The buyout is also significant considering Entercept has a strategic partnership with NAI rival Symantec .

Entercept’s flagship products, Entercept 2.0 and Entercept Web Server Edition detect known attacks via signature technology and in detection of unknown or zero-day attacks through the use of behavioral methodologies.

Over the last few months, Entercept said NAI evaluated a range of prevention technologies for the host/server environment. The company claims NAI was impressed with its high level of accuracy including being able to identify and disable the recent Slammer worm even though the threat spread around the world in three minutes.

Since its inception, Entercept says it has built a customer base of more than 1,100 enterprise and government customers including New Century Mortgage, First Citizens Bank, Corio and Arlington County in Virginia. The company has also received major funding from Intel Capital .

“Entercept has proven success in delivering next-generation solutions that actively block security attacks,” said Entercept president and CEO Lou Ryan. “Network Associates’ global presence and market leadership in the anti-virus space will enable worldwide expansion of the Entercept solutions.”

Ryan says NAI will continue to ship the Entercept products as standalone products for the foreseeable future with “no current plans to change the product pricing.”

Entercept said it will contact its partners to discuss the details associated with becoming an NAI VAR.

Neither company would say how many employees would be impacted by the acquisition. In addition to its San Jose offices, Entercept has European headquarters in Borehamwood, United Kingdom.

Network Associates is comprised of three product groups: McAfee Security (anti-virus and security products); Sniffer Technologies (network availability and system security); and Magic Solutions (service management).

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