Sand Hill IT Security Acquisition Corp, a public targeted acquisition corporation, has entered into a definitive merger agreement with privately held IT security company St. Bernard Software.
Under the terms of the deal St. Bernard Software will merge with a wholly-owned subsidiary of Sand Hill, in an all-stock transaction. The merger agreement means that St. Bernard Software stockholders will own approximately two-thirds of the outstanding shares of common stock of the merged company.
St. Bernard Software is a San Diego-based company which designs security appliances and software that offer perimeter and system security solutions, including web and email filtering, for small and medium sized enterprises (SMEs). The combined company plans to operate under the St. Bernard Software name.
St. Bernard Software had revenue and net income during the third quarter ended September 30, 2005 of approximately $6.8m and $0.7 million, respectively. It has more than 8,200 customers and currently employs 160 staff.
Once combined, the merged company's management indicated it plans to focus on the "fast growing and under penetrated" SME security software market, with emphasis on simple to install and maintain appliances and subscription services.
"St. Bernard Software is well positioned to serve the SME market, which represents a significant percent of overall demand for IT security," said John Katsaros, research principal and co-founder, Internet Research Group.
Humphrey Polanen, chairman and CEO of Sand Hill, said: "St. Bernard Software's business model is subscription based, creating a recurring revenue stream that we believe should lead to an increased revenue visibility beyond that of a traditional software company with a licensing model.
John E. Jones, President and CEO of St. Bernard Software, will become the President and CEO of the combined company.