Internet Security Systems (ISS) yesterday announced that it had
reached an agreement to acquire Network ICE, a maker of desktop
security products, in a deal valued at $195m (£136m).
The deal, which will marry the publicly traded ISS's line of
corporate security products and services to privately-held Network
ICE's desktop firewall, virtual private network (VPN) and intrusion
detection systems, will be an all-stock transaction, based on the
Friday closing price of ISS's stock. ISS will issue 4.3 million
shares of ISS common stock for Network ICE. The move has already
been approved by both companies' boards of directors and has the
assent of the owners of 70% of both companies' stock, according to
ISS. The deal is subject to standard regulatory approvals and is
expected to close in June, ISS said.
The combination of ISS and Network ICE will create "the most
pervasive protection system in the industry", said Tom Noonan, ISS
president and chief executive officer, in a conference call. ISS
will now be able to offer a comprehensive security service to its
customers, which will secure desktops, servers, gateways, mobile
devices, remote workers and telecommuters, all from one centralised
administration point, he said
Network ICE offered three key improvements to ISS, Noonan said.
First, the ability to secure desktop systems; second, increased
scalability of security offerings, which will help drive ownership
costs down for customers; third, the ability to significantly
enhance managed security services, thus lowering costs, but also
raising margins.
As a result of the deal, ISS also issued an updated financial
forecast for the second quarter. ISS said it expects that the deal
will result in additional quarterly revenue of $10m to $15m, with
total revenue for the quarter expected to come in at $295m to
$300m. The company also said that earnings per share ought to be in
the 65-70 cents range. ISS's earnings will be announced in the
third or fourth week of July, the company said.
In mid-morning trading, ISS stock (ISSX) was down 87 cents, or
1.8%, to $49.02.