BindView will issue 1.4 million shares at today's closing price of 23.625 to acquire Netect, which has about 30 employees in the United States and Israel. BindView's stock dropped 1.125 on news of the buyout, which was announced before the market opened.
The deal is the latest in a trend of acquisitions of small Internet security companies.
"This acquisition makes a lot of sense--BindView is clearly in the security market," security analyst Steve Foote of Hurwitz Consulting Group said in a statement. "The synergy between product capabilities and sales channels gives BindView an advantage in markets that other traditional security companies have not been able to sell to--LAN and system administrators."
"BindView products work at the network operating system level, but on the network level--servers, workstations, IP devices--we did not have a security scanning product," said Thomas Oldroyd, product marketing manager at BindView.
BindView's software helps local area network administrators manage their operations and assess security vulnerabilities. Its products run on Windows NT and Netware, and the Netect acquisition jump-starts BindView's efforts to introduce products for Unix systems too, where it will begin with the Solaris operating system.
BindView competes with firms like Axent, which also has a line of security and network management software. Netect came late to the intrusion-detection market, which has seen a slew of acquisitions in the last year. Major players include Cisco Systems and Internet Security Systems.
For the near term, Netect's HackerShield will be marketed as a separate product, Oldroyd said, but BindView plans to integrate it as a plug-in into its EMS family of systems management products, which are controlled from a central console.
BindView has about 300 employees and reported revenues of $38 million last year.