Check Point Software buys firewall vendor Zone Labs

Seeking to expand its product offerings, network security vendor Check Point Software Technologies is acquiring firewall software company Zone Labs for US$205 million.

The deal, which was announced Monday, will add end-user firewall tools to Check Point's family of products and bring Check Point more than 25 million customers, according to the companies. More than 200 Zone Labs employees will move to Check Point's workforce.

Check Point will pay about US$113 million in cash and about US$92 million in shares for Zone Labs. The merger agreement has been approved by the boards of directors of both companies. The deal, which is expected to close in the first quarter of 2004, still needs approval from Zone Labs shareholders and from US federal regulators. Zone Labs will operate as a division of Check Point after the acquisition.

Gil Shwed, chairman and CEO of Check Point, said in a statement that Zone Labs' ZoneAlarm and Integrity product lines complement Check Point's vision and SecureClient VPN/security products and will allow better integration of the companies' applications for users.

"Both companies share a deep commitment to customers, and this acquisition will enable us to deliver the industry's most comprehensive end-to-end Internet security to all types of customers -- from consumers to the largest enterprises," Shwed said.

Meanwhile, Alan Currie, managing director at Secure Tec Australasia, one of the Australian distributors for Zone Labs, said he would be having a conference call with Zone Labs later this week to discuss where Secure Tec stood in the distribution of the Zone Lab products.

"These developments could change our business model," he said.

Secure Tec started distributing Zone Lab products in April 2003. During this time Currie said it has focused not only on the Zone Alarm Pro personal firewall product, but also in building the sales channels for Zone Labs in Australia, New Zealand, South Pacific, PNG and the Philippines.

Zone Labs other Australian distributors are Dovetail Distribution and AnswerZ. They both focus on the company's enterprise products.

(Howard Dahdah contributed to this report.)