Secure Computing buys CyberGuard

Secure Computing has reached an agreement to buy rival CyberGuard for nearly $300 million. The move is the latest in a trend of consolidation in the IT security market.

Under the agreement, Secure Computing will issue 0.5 shares of Secure Computing common stock and $2.73 in cash for each outstanding share of CyberGuard common stock. CyberGuard shareholders will get approximately 16.5 million shares in the new company, which will represent approximately 28 percent of the outstanding stock of the combined company after the close of the transaction.

Based on Secure Computing's closing share price of $12.18 on Wednesday, the market value of the transaction is expected to be approximately $295 million.

Secure Computing CEO John McNulty said the deal would make the combined company "the leader in the unified threat management market".

"It will also accelerate our ability to further penetrate the secure content management market," said McNulty. "We believe the acquisition will be accretive to Secure Computing's earnings within the second full quarter of operations following the close of the transaction."

In addition private equity firm Warburg Pincus will invest $70 million in the company in the form of convertible preferred stock with warrants.

Earlier this week, SC Magazine reported that Symantec inked a deal to acquire endpoint security product vendor Sygate Technologies for an undisclosed sum.

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