Secure Computing Completes Merger With CyberGuard; Combination Accelerates Vision to Become Preeminent Provider of IT Security f
January 12 2006 - 3:23PM
Business Wire
Secure Computing Corporation (NASDAQ:SCUR), the experts in securing
connections between people, applications and networks(TM), today
announced it has completed its merger with CyberGuard Corporation
(NASDAQ:CGFW), a global provider of security solutions that protect
the critical components of the largest and most complex information
networks for Global 2000 enterprises and government organizations.
The merger creates a new leading IT security provider, which has a
combined customer base of over 17,000 customers and 1,300 resellers
worldwide, with distribution channels extending across more than
100 countries. "We believe that CyberGuard is a perfect fit for
Secure Computing, as it accelerates the company's strategic vision
and better positions us in the two fastest growing segments of the
security industry," said John McNulty, chairman, president, and CEO
of Secure Computing. "By combining the two companies, Secure
Computing is the new market leader in the Unified Threat Management
(UTM) market, the fastest growing segment of the IT security market
according to IDC. This merger also accelerates our position in the
Secure Content Management (SCM) market, and clearly positions
Secure Computing as the number two player in web filtering with
approximately 21 million licensed seats." McNulty continued, "Going
forward, we will leverage our complementary technologies and
channel partnerships, and gain additional important competitive
advantages in the market." On January 11, 2006, Secure Computing
stockholders approved the issuance of shares of Secure Computing
common stock to the holders of shares of CyberGuard common stock in
connection with the merger at Secure Computing's special meeting of
stockholders. Also on January 11, 2006, CyberGuard stockholders
voted to approve the merger agreement and the merger between the
two companies. Effective immediately, CyberGuard will become
integrated into Secure Computing and the CyberGuard ticker symbol,
CGFW, will be removed from the NASDAQ listing before tomorrow's
opening of market. In connection with the merger, Richard L. Scott,
a member of CyberGuard's board of directors, and Cary J. Davis, a
Warburg Pincus managing director, are being added to Secure
Computing's Board of Directors. At its special meeting, Secure
Computing stockholders also approved two additional proposals: (i)
the issuance of shares of Secure Computing Series A preferred stock
and a warrant to purchase shares of Secure Computing common stock
to Warbug Pincus Private Equity IX, L.P. and (ii) amendments to the
Secure Computing amended and restated 2002 Stock Option Plan to
increase the number of plan shares by 1,500,000, among other
changes. In connection with this transaction, Warburg Pincus, the
global private equity firm and a leading investor in technology
companies, will invest $70 million in Secure Computing in the form
of convertible preferred stock with warrants. The preferred stock
will be convertible at $13.51 per share, representing an 11 percent
premium to the closing price of Secure Computing's common shares on
August 17, 2005, and will include a 5 percent dividend which shall
be paid-in-kind for the first 4.5 years and thereafter may be paid
in cash, at the option of Secure Computing. Warburg Pincus will
also receive 1.0 million warrants to purchase Secure Computing
common stock at a price of $14.74, representing a premium of 21
percent to the closing price of Secure Computing's common shares on
August 17, 2005. The convertible preferred stock is not redeemable
but may be converted to common at any time by Warburg Pincus and
after one year by Secure Computing subject to the achievement of
certain share price performance milestones. This investment will
close concurrent with, and is contingent upon, the closing of the
CyberGuard transaction. Conference Call Secure Computing will hold
a conference call on Thursday, February 2, 2006, at 4:30 p.m.
EST/1:30 p.m. PST, at which time Secure Computing executives will
discuss the merger and provide 2006 financial guidance, along with
its full financial results for the fourth quarter of 2005. If you
would like to participate in the conference call, please dial-in
five minutes prior the start time at: -0- *T North America:
888-791-1856 International: 210-234-0004 Leader: Jane Underwood
Passcode: SCUR *T This call is being web cast by Thomson/CCBN and
can be accessed at the Investor Relations section of the Secure
Computing web site at: www.securecomputing.com. A rebroadcast of
the call will be available at the Investor Relations section of the
Secure Computing web site. In addition, a telephone replay will be
made available through February 9th by accessing, 800-873-2068 for
North America or 402-220-5051 for international. About Secure
Computing Secure Computing (NASDAQ:SCUR) has been securing the
connections between people and information for over 20 years.
Specializing in delivering solutions that secure these connections,
Secure Computing is uniquely qualified to be the global security
solutions provider to organizations of all sizes. Our more than
14,000 global customers, supported by a worldwide network of
partners, include the majority of the Dow Jones Global 50 Titans
and the most prominent organizations in banking, financial
services, healthcare, telecommunications, manufacturing, public
utilities, education, and federal and local governments. The
company is headquartered in San Jose, Calif., and has sales offices
worldwide. For more information, see
http://www.securecomputing.com. Forward Looking Statements The
statements contained in this release, which are not historical
facts, are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Examples of such forward-looking statements
include Secure Computing's belief that CyberGuard is an excellent
fit with Secure Computing, the acquisition of CyberGuard will
strengthen Secure Computing's current activities, and that the
merger will add a base of new customers, expand the scope of Secure
Computing's product line and be accretive to Secure Computing's
earnings within the second full quarter of operations following the
close of the transaction. These statements are subject to
uncertainties that could cause actual results to differ materially
from those set forth in or implied by forward-looking statements.
These risks and uncertainties include, among others, the following
risks: that customers and partners will not react favorably to the
merger, risks associated with acquiring other companies, including
integration risks, and other risks described in Secure Computing's
and CyberGuard's Securities and Exchange Commission filings,
including the Registration Statement on Form S-4 filed with the SEC
in connection with the transaction, Secure's Annual Report on Form
10-K, as amended, for the year ended December 31, 2004 and its
Quarterly Report on Form 10-Q, as amended, for the quarter ended
September 30, 2005, under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," and CyberGuard's Annual Report on Form
10-K, as amended, for the year ended June 30, 2004, and its
Quarterly Report on Form 10-Q for the quarter ended September 30,
2005, under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations." Neither Secure nor CyberGuard undertake any obligation
to update these forward-looking statements to reflect events or
circumstances after the date of this press release.
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