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Guardent co-founder and executive vice president, Dan McCall, said the acquisition would give the security provider access to a more diverse client base and a "telco-grade operations centre in Providence."
Guardent provides security and privacy programs to Global 2000 companies, while DefendNet's client base grew out of small and mid-size businesses looking to host secure Web sites. "DefendNet was not in a position to go it alone," McCall claimed.
McCall said that although DefendNet had a good business plan, in a soft economy, a company had to have a perfect plan that was perfectly executed. "There is not a lot of tolerance" in today's conditions, he added.
An employee at DefendNet confirmed yesterday that the company had been acquired by Guardent.
In recent weeks, at least two security providers have fallen on hard times. Baltimore Technologies in Dublin announced last week that it was cutting its staff by 18%. While late last month, Pilot Network Services suspended operations and laid off all of its employees.
McCall said that while the current economic climate has been difficult for some firms, the security industry appeared to be settling down. "Things are starting to stabilise," he said. "This feels a lot like the early 1990s, when you actually had to work for a living."
He said that the following three main trends continue to drive the security business:
Firstly, new government regulations, such as the Health Insurance Portability and Accountability Act, are focusing attention on privacy concerns. Secondly, brick-and-mortar companies are still moving ahead with building Web sites, despite the slowing economy and recent cutbacks by dot-com companies. And thirdly, said McCall, "The bad guys are still out there."
In addition to the acquisition, McCall said that Guardent plans to announce a package of $20m (£14m) in Series C financing, led by Citicorp Strategic Investments. Mercury Interactive and existing investors Charles River Ventures, New Enterprise Associates and Sequoia Capital also participated in the latest funding round. In addition, Kate Sullivan, chief operating officer for Citigroup's e-Citi unit, has joined Guardent's board of directors.
McCall said having a broad base of financial support allowed his company to acquire DefendNet and hampered that company's ability to remain independent. DefendNet, he said, had only one main backer.
In addition to DefendNet's assets, Guardent will also absorb about 20 employees. McCall admitted that some employees at DefendNet may have recently lost jobs, but said the redundancies had occurred before the acquisition and that he had no information about them.