Websense makes £201m bid for SurfControl

Security software vendor Websense has moved to acquire competitor SurfControl, with a Websense subsidiary offering about £200m in cash for SurfControl.

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Security software vendor Websense has moved to acquire competitor SurfControl, with a Websense subsidiary offering about £200m in cash for the UK company.

Websense Operations has offered to acquire the SurfControl for a total £201m, Websense announced.

Doug Wride has also been named president of Websense, with immediate effect. He will continue in his role as chief financial officer and lead the acquisition and integration of SurfControl. Wride will continue to report to Websense chief executive Gene Hodges.

The combination of the two companies will create "an IT security solutions company with the scale and product offering to compete more effectively with large global security software companies", Hodges said .

Both companies provide proactive network security software to head off potential phishing, spyware, virus and other threats to IT systems. SurfControl serves 16 million users globally and Websense serves 25 million.

Websense has noted that the acquisition will give it access to SurfControl's BlackSpider software-as-a-service offering for website and email security, which SurfControl gained in a 2006 acquisition. "Websense views the on-demand delivery model as very important to its current and future product offerings," the document said.

Websense says the acquisition is expected to result in $60m (£30) in cost savings and, although it will initially dilute Websense's earnings in the short term, it is expected to improve earnings in the 12 months after the deal closes, which is expected in about four months.

Some of the savings may come from layoffs, but the company was not specific on how many of Websense's 750 employees and SurfControl's 600 will lose their jobs. Websense said while it anticipates "significant restructuring", the new combined companies will be able to grow enough to create more jobs in the future.

Websense posted net income of $32m (£16m), or $3.85 (£1.90) per share, on revenue of $171.8m (£85m) in 2006.

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