Security software vendor, Websense, has moved to acquire competitor SurfControl, with a Websense subsidiary offering about $US400 million in cash for SurfControl.
Websense SC Operations Ltd. has offered to acquire SurfControl, based in the UK, for £7 ($US14.02) per share, for a total £201 million ($402.7 million), Websense said.
Doug Wride has also been named president of Websense, effective immediately. He will continue in his role as chief financial officer and lead the acquisition and integration of SurfControl. Wride will continue to report to Websense CEO, Gene Hodges.
The combination of the two companies will create "an IT security solutions company with the scale and product offering to compete more effectively with large global security software companies," Hodges said in a prepared statement.
Both companies provide proactive network security software to head off potential phishing, spyware, virus and other threats to IT systems. SurfControl serves 16 million users globally and Websense serves 25 million.
In a 36-page document detailing the acquisition plans and combined product road maps, Websense notes that the acquisition will give it access to SurfControl's BlackSpider software-as-a-service offering for website and email security, which SurfControl gained in a 2006 acquisition. "Websense views the on-demand delivery model as important to its current and future product offerings," the document said.
Websense claims the acquisition is expected to result in $60 million in cost savings and, although it will initially dilute Websense's earnings in the short term, it is expected to improve earnings in the 12 months after the deal closes, which is expected in about four months.
Some of the savings may come from lay-offs, but the company was not specific on how many of Websense's 750 employees and SurfControl's 600 will lose their jobs.
Websense said while it anticipated significant restructuring, the new combined companies would be able to grow enough to create more jobs in the future.
Websense posted net income of $US32 million, or $US3.85 per share, on revenue of $US171.8 million in 2006.