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McAfee to buy Foundstone for US$86 million

McAfee to buy Foundstone for US$86 million

Antivirus software company, McAfee, is buying Foundstone, which makes software for detecting and managing software vulnerabilities, for $US86 million in cash.

The acquisition will add Foundstone's line of vulnerability management software to McAfee's growing list of security products. McAfee plans to combine Foundstone's technology for spotting and remediating software vulnerabilities with its intrusion detection and security policy management products, allowing companies to identify and shield high-priority computer assets from attack.

As part of the deal, Foundstone's professional services group will become part of McAfee's services team, McAfee said.

McAfee's purchase of Foundstone follows moves in the last year to focus its product offerings and bolster its standing in the intrusion detection and prevention market. In April 2003, McAfee, formerly Network Associates, paid $US220 million to purchase two US-based companies: IntruVert Networks and Entercept Security Technologies.

The acquisitions gave McAfee a jump start in detecting both network-based attacks, IntruVert's specialty, and attacks targeted at network servers, or hosts.

McAfee in recent months has also shed products and business units. In December 2003, the company announced the sale of its Magic help desk and management software division to BMC Software, an enterprise management products maker, for $US47 million.

In April, the company said it was selling its Sniffer family of network management products for $US275 million in cash to an investment group including Silver Lake Partners and Texas Pacific Group, which relaunched the product under the auspices of a reconstituted Network General.

The purchase of privately held Foundstone, which began in 1999 as a security consulting services company and more recently began marketing and selling security software and hardware, would complement McAfee's investment network and host intrusion prevention technologies, Gartner analayst, John Pescatore, said.

"Now that you have host and network intrusion detection, companies need to know where they're vulnerable, so vulnerability management becomes important," he said.

The purchase of Foundstone gave McAfee access to Foundstone's marquis vulnerability management customers, many of them large enterprises, and boostedMcAfee's otherwise unremarkable professional services group, Pescatore said.

McAfee said it expected its acquisition of Foundstone to be complete in the next 60 days and that it would update its financial guidance for the fourth quarter 2004, and for fiscal year 2005 to account for the Foundstone purchase.


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