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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.