Secure Computing and CipherTrust merge in $273.6 million deal

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Secure Computing announced Tuesday that it is purchasing CipherTrust for total consideration of $273.6 million.

The total payout to CipherTrust will be $185 million in cash, 10 million shares of Secure Computing common stock and a $10 million seller note that is subject to performance obligations. CipherTrust shareholders will have an approximate 14-percent ownership position in Secure Computing once the deal is done.

Known best for its technologies in secure content management, identity management and unified threat management, Secure Computing will gain an added advantage in messaging gateway security with this acquisition of CipherTrust, said key executives at both companies.

"The fit is literally hand in glove," said Jay Chaudhry, CipherTrust CEO.

Once the deal is finalized, Chaudhry will join the Secure Computing Board of Directors as vice chairman and will serve on the company's executive team as chief strategy officer. He will be joined by a number of other members of the CipherTrust management team in leadership roles at Secure Computing.

"This is a tremendous addition to our senior management bandwidth, which is something, frankly that we needed," said John McNulty, Secure Computing CEO. "One of the things we were looking for were great additions to the executive team."

Both McNulty and Chaudry emphasized that the deal is a merger rather than a straight acquisition. Nearly all CipherTrust employees will continue on with the company, they said. They anticipate the proceedings to be finalized by Sept. 8.

Depending on the closing day of transaction, Secure Computing expects CipherTrust to add approximately $15 million to $20 million in 2006 and roughly $80 million in 2007.

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