McAfee to acquire Secure Computing for $465M

Deal expected to be completed by year-end.

McAfee on Monday announced an agreement to acquire Secure Computing in a transaction valued at US$465 million that is expected to be completed by year-end.

The deal is being touted as combining Secure Computing's strengths in firewall, Web and e-mail gateway filtering with McAfee's intrusion prevention, desktop encryption, data-leak prevention, antimalware, regulatory compliance and centralized management.

One presumed benefit of the deal is that buying behavior in the corporate security arena favors vendors that can offer a broad and complete line of security products, says McAfee CEO Dave DeWalt.

"Without question the products have to be good," DeWalt says. "But it's also about the broadest suite of protections at the lowest costs," and vendors that can bring a comprehensive set of products to the table during a customer's review period have advantages over those more limited in product scope, he says.

John Pescatore, an analyst at Gartner, says the merging of these security firms does provide a benefit of scale in product offerings.

"It gives McAfee and Secure Computing a way to compete with Cisco and Juniper," Pescatore says. But he also notes there is overlap in the product line with both vendors supplying Web gateways, which will have to be addressed.

Secure Computing widely licenses its SmartFilter gateway filter to others in industry, and McAfee licenses it in its Web gateway. DeWalt says the McAfee gateway is more targeted toward small-to-midsize businesses than Secure Computing's enterprise-scale Secure Web. The plans call for McAfee to continue Secure Computing's practice of widely licensing SmartFilter to others in industry.

Dan Ryan, CEO at Secure Computing, is expected to join McAfee as executive vice president and general manager to head up McAfee's network-security business.

"We see this as the best plan for our company and its shareholders," Ryan says, adding Secure Computing plans to complete the acquisition already in progress of Securify, a maker of an identity-based application firewall system.

While the two firms won't discuss specific product integration plans, it's expected that Secure Computing products will eventually be integrated into McAfee's umbrella management console, ePolicy Orchestrator, after the merger is completed.

McAfee has 4,558 employees globally and Secure Computing has about 900 employees. DeWalt says the vast majority of Secure Computing employees are expected to join McAfee.

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