Secure Computing Acquires CipherTrust

By | September 1, 2006

Secure Computing Corporation has announced that it has closed its acquisition of CipherTrust, Inc., the global leader in the messaging security market. This merger firmly establishes Secure Computing as a dominant player in the enterprise gateway security market.

In addition to protecting corporate network infrastructures, the combined company’s solutions will address the fast-growing Web and messaging gateway security needs. These solutions protect against malicious inbound attacks such as spam, viruses or other malware; from policy and regulatory compliance violations related to sensitive data leaks; and compromises in identity and access control.

Secure Computing has significantly expanded its product portfolio with the addition of the industry’s preeminent messaging security solution – powered by the Company’s patented global reputation technology TrustedSource™ — that has consistently been recognized for its technology leadership by authorities such as Gartner, IDC and numerous technology publications. The combined product portfolio now consists of unique, best-of-breed, integrated solutions that provide uncompromising functionality with low total cost of ownership by eliminating the need for customers to deploy, and manage disparate point products from multiple vendors.

This transaction also provides the opportunity to accelerate the combined company’s revenue growth by making the high-growth messaging product line available to Secure Computing’s worldwide channel network. Together, Secure Computing now has more than 18,000 customers and 1,800 resellers in 106 countries, thereby delivering even greater opportunities to cross-sell the full Secure Computing product line.

Under the terms of the agreement, net consideration for the transaction was $185 million in cash, 10 million shares of Secure Computing common stock, and a $10 million seller note that is subject to certain performance obligations. Concurrent with the closing of the merger, Secure Computing also closed a senior secured debt facility from a syndicate of banks led by Citigroup and UBS Investment Bank. The facility is comprised of a $90 million term loan and a $20 million revolving credit facility.

In conjunction with the closing of this transaction, Jay Chaudhry, former CEO, chairman and founder of CipherTrust, has joined Secure Computing’s Board of Directors as vice chairman and is serving as the company’s chief strategy officer. Dr. Paul Judge, former chief technology officer of CipherTrust, and Atri Chatterjee, former senior vice president, marketing of CipherTrust, have also joined the company’s senior leadership team in their respective roles.

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