McAfee plans Secure Computing acquisition

 

Gallery

By Reuters

Posted on 23 Sep 2008 at 10:28

McAfee plans to buy Secure Computing for $465 million, bringing it technology that keeps hackers from breaking into computer networks.

The company will pay $5.75 per share of Secure Computing's common stock, representing a 27% premium. The news sent the company's shares up 23%, while McAfee shares fell 1.7%.

McAfee chief executive Dave DeWalt claims the purchase will help round out McAfee's line of products that protect business networks. So far McAfee only has "a few thousand" network security customers, he says, but the acquisition will add 22,000 more customers in that area.

"The market is moving toward bigger vendors with broader suites. That just means more dollars for McAfee," says DeWalt. "That is why McAfee is expanding the portfolio."

Jefferies & Co analyst Katherine Egbert says that while Secure Computing has great technology for protecting computer networks from hackers, it has a reputation for being difficult to use.

"Strategically the deal makes a lot of sense," Egbert says. "But the challenge is going to be getting their products ready for mass distribution."

Secure Computing had struggled over the past year as it replaced its chief executive and its stock languished, losing more than half its value in 2008, versus a 14% decline in the Nasdaq Composite Index.

The companies expect the transaction to close at the end of the fourth quarter of this year.