Secure Computing buys messaging Trust.

Secure Computing agreed to acquire messaging security appliance leader CipherTrust for $273.6 million in cash and stock.

CipherTrust's IronMail appliances and TrustedSource firewall software stop inbound messaging threats over e-mail, instant messaging and Web-based mail. These include spam, viruses, intrusions and phishing, all methods that have been duping computer users on a regular basis and are growing more sophisticated. CipherTrust's products also help prevent policy and compliance violations associated with sensitive data leakage. IDC said CipherTrust is the leader in the messaging security gateway appliance market, which is expected to grow to $1.7 billion in 2009.

Appliances are becoming the preferred method of deploying security applications; IDC estimates that 80 percent of all network security software will be piped through an appliance by 2007.

Secure Computing feels that adding CipherTrust now will enable it to better compete with vendors of security products.

The deal comes amid a raft of security consolidation in the past few months. The San Jose, Calif., company said second quarter earnings would be between $38.5 million and $39 million, less than the $43 million to $45 million the company expected.

Company officials blamed the shortfall on "deal slippage" in the Midwest and eastern part of the U.S., as well as in the Asia-Pacific region. Secure Computing's bid for CipherTrust will include $185 million in cash, 10 million shares of Secure Computing common stock, and a $10 million seller note that is subject to performance obligations.

The transaction is expected to close by Sept. 8th. Secure Computing said it expects CipherTrust to add roughly $15 million to $20 million in revenue in 2006, and $80 million in revenue in 2007.

www.securecomputing.com