E-mail security firm Websense has entered into an agreement to buy a competitor, SurfControl PLC, in a deal worth more than $400 million. The deal is a cash offer, with Websense offering 700 pence per share for the London, England-based SurfControl. That comes out to approximately £201 million, or $400 million at current exchange rates.
The company also announced that CFO Doug Wride has been named president of the company, effective immediately. He will retain his CFO duties and will be responsible for closing the SurfControl deal and the company’s integration. Wride will continue to report to Websense CEO Gene Hodges.
The deal has already been unanimously approved by the boards of both companies but will have to go through both US and UK regulatory approval. The transaction is being financed through a combination of Websense’s existing cash reserves and non-equity funding from Bank of America and Morgan Stanley Senior Funding.
Websense provides Web security and filtering software, helping to discover and protect customers against Web-based threats such as spyware, phishing attacks and viruses. SurfControl provides Internet threat security software as well as software to provide business and regulatory compliance.
Between the two companies, they will have a combined installed base of more than 49,000 customers, with more than 41 million seats under subscription and 2006 revenue of approximately $293 million. Both have extensive reseller partners worldwide. They will have product offerings covering a range of customer sizes, from small businesses to large enterprises.
“The combination of Websense and SurfControl is expected to benefit customers, partners and shareholders by creating an IT security solutions company with the scale and product offering to compete more effectively with large global security software companies,” said Hodges in a statement. “A further objective of the acquisition is to complement and accelerate our stated growth initiatives, particularly in the strategically important SMB
Websense has been on a bit of a buying spree. It acquired PortAuthority Technologies last December for $90 million.
While Websense declined to discuss the acquisition further citing regulations on a foreign acquisition, it did say in the filing that it expects to achieve “cost synergies” over the next 12 months of at least $60 million, which would indicate some cutting and consolidation, even though the two offices are 6,000 miles apart. The deal is expected to close in approximately four months.
