Secure Computing plans to acquire email security vendor, CipherTrust, in a deal valued at close to $US274 million.
The acquisition, which is expected to be completed by September 8, will help Secure Computing expand its line of Internet gateway security appliances. "This transaction provides us with an expanded set of technologies in a market that's growing," Secure Computing chairman, president and CEO, John McNulty, said. "By combining with CipherTrust, Secure Computing will now be able to offer highly integrated and differentiated secure content management enterprise solutions."
CipherTrust's IronMail email security appliances are designed to protect email servers from spam, phishing attempts and malicious messages.
Secure Computing also plans to take advantage of CipherTrust's TrustedSource email reputation system, which gathers information from more than 4000 gateway appliances in more than 40 countries worldwide. The gateways analyse billions of messages per month, according to CipherTrust.
The combined company would have 300 sales staff, 18,000 customers and 1700 resellers worldwide, McNulty said.
Cipher Trust CEO, Jay Chaudhry, will become Secure Computing's chief strategy officer.
CipherTrust CTO, Paul Judge, will assume the CTO role at Secure Computing.
Under terms of a definitive agreement, Secure Computing will pay $US195 million in cash along with 10 million Secure Computing shares, valued at about $US80 million.
The deal may be worth less than originally estimated, however, as Secure Computing's stock (SCUR) dropped nearly 40 per cent on news that the company would miss its earnings estimates.
Secure Computing had hoped to report between $US43 million and $US45 million in revenue for its most recent quarter, which ended June 30. However, it revised this guidance downward on Tuesday, saying revenue would be in the range of $US38.5 million to $US39 million.
The acquisition comes on the heels of Secure Computing's January purchase of firewall and content-filtering vendor, Cyberguard.
During a conference call with analysts, McNulty said the Cyberguard acquisition was not to blame for the company's shortfall but admitted the numbers were bad.
"We are terribly disappointed and embarrassed by the shortfall," he said.