Secure Computing has signed a definitive agreement to acquire all of the outstanding common stock of CyberGuard. The market value of the transaction is expected to be approximately $295 million on a fully diluted basis. Based on the average closing price for the 10 days ended Aug. 16, 2005, for both companies, the offer represents a 16 percent premium to CyberGuard shareholders.
In conjunction with this acquisition, Richard L. Scott, a current member of CyberGuard’s board of directors, will join Secure Computing’s Board of Directors following the close of the transaction. Additionally, Warburg Pincus, the global private equity firm and a leading investor in technology companies, will invest $70 million in Secure Computing in the form of convertible preferred stock with warrants.
“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 John McNulty, chairman, president and CEO of Secure Computing. “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 No. 2 player in web filtering with approximately 21.0 million licensed seats.”
