Secure Computing closes out $295 million deal for rival CyberGuard |
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Sun, 21 Aug 2005 19:05
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SAN JOSE, California - Security equipment maker Secure Computing has announced that it had reached an agreement to buy out its rival CyberGuard in a deal worth $295 million.
By sealing this deal, the firm hopes to spur its revenues from $110 million per year to $200 million, according to Mike Gallagher, senior vice president of product development at Secure.
However, the company has warned that there would be restructuring as well as some lay offs in CyberGuard. The reason for culling these jobs happens to be the fact that both companies specialize in identical equipment like firewalls, VPNs and web filtering tools. Gallagher said as much, "There is overlap in some assets," he admitted. He added that Secure Computing's G2 Sidewinder firewall was in direct competition with CyberGuard's Total Stream Protection series of firewalls. CyberGuard's lower-end SG line of firewall/VPN products are bound to be a huge hit with Secure Computing since it does not have anything in production at that level. "We're going to offer all these products in the near term but there are redundant capabilities here," said Gallagher. "There are going to be branding changes and new products will almost certainly come out of it. But there's no roadmap yet."
CyberGuard's WebWasher that is a Web filter with support for anti-virus and anti-spam filtering is also a product that Secure would be looking to market aggressively. Secure's product by comparison is able to accomplish only outbound Web filtering. Commenting on the merger, Pat Clawson, chairman and CEO of CyberGuard, said that he was in favor of the move since it brought "together two successful leaders in IT security technology." Private equity firm Warburg Pincus will finance the deal.
CyberGuard board member Richard L. Scott will be offered a seat in Secure's board of directors as a part of the deal. "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. It will also accelerate our ability to further penetrate the Secure Content Management market, and clearly positions Secure Computing as the number two player in web filtering with approximately 21.0 million licensed seats," said John McNulty, chairman, president and CEO of Secure Computing.
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