Secure Computing Corp.
is acquiring IT security rival
in a $295 million stock and cash deal. The
transaction combines the two market leaders in the application proxy
Under the agreement, the San Jose, Calif.-based Secure Computing will issue
0.5 shares of its common stock and $2.73 in cash for each
outstanding share of CyberGuard common stock. As part of the deal, private
equity firm Warburg Pincus will invest $70 million in Secure Computing.
“This transaction meets important strategic priorities and better positions
Secure Computing in two of the fastest growing markets of the security
industry,” John McNulty, president and CEO of Secure Computing, said in a
statement. “By combining the companies, Secure Computing will be the leader
in the unified threat management market, the fastest growing segment of the
IT security market according to IDC.”
McNulty also noted the deal will accelerate his company’s ability to
penetrate the secure content management market and positions the combined
firms as a major player in the Web filtering field with approximately 21
million licensed seats.
“The acquisition of CyberGuard will bring together two companies with highly
complementary strengths and market synergies, and will allow us to
accelerate our strong pace of success over these last few years,” said
The combined company includes 680 employees, more than 17,000 customers and
1,000 resellers in over 90 countries. Both Secure Computing and CyberGuard
also have OEM and channel partnerships with companies including Cisco, Blue
Coat, Network Appliance, Dell, AT&T and Citrix.
The merger is subject to the usual closing conditions, including the
approval of CyberGuard’s and Secure Computing’s shareholders, and is
expected to close during the fourth calendar quarter. Each company’s
executive officers and directors who are stockholders have agreed to vote in
favor of the merger. The Warburg Pincus financing will not close unless the
merger is completed.
Cary J. Davis, a Warburg Pincus managing director, will join the Secure
Computing Board of Directors once the deal closes.
“We believe that the proposed combination with CyberGuard further enhances
the company’s capabilities and clearly positions Secure Computing as a
leading global security solutions provider,” Davis said.