Under the terms of the deal, Secure Computing will issue 0.08 shares of its stock for each outstanding share of N2H2 stock. The all-stock transaction is valued at approximately $19.9 million.
"N2H2 is an excellent fit with Secure," Tim McGurran, president and chief operating officer of Secure Computing, a San Jose, Calif.-based security company, said in a statement. "This acquisition increases our market share and critical mass in the Internet content filtering marketplace and adds an impressive base of over 2,000 new customers."
The move comes a month after the U.S. Supreme Court upheld a law that requires libraries that receive federal funds to install blocking software on computers that connect to the Internet. The law is meant to prevent minors from seeing pornographic material. Filtering companies roundly cheered the decision, hoping it would boost their bottom line as more libraries buy blocking software.
The Federal Communications Commission, which is responsible for enforcing the law, recently gave libraries an extra year to comply. Libraries now have until July 2004 to block minors from viewing inappropriate material or risk losing federal funds.
Other major filtering companies include Websense and SurfControl.