ISS Group, Inc., parent company of Internet Security Systems, Inc. (Nasdaq:ISSX) said Tuesday it plans to buy privately-held Netrex Secure Solutions for about $57 million to extend its reach in the Internet security industry.
Shares in ISS, headquartered in Atlanta, Georgia, closed at 23 5/16 Monday. Shares recently dipped following a downgrade despite positive earnings.
Netrex, a provider of remote, security monitoring services had revenue for the year ended December 31, 1998 of about $21.8 million. The company has a current services customer base of more than 500 customers, and is the pioneer and largest independent provider of security management services.
The acquisition is a major development in the, as ISS extends its market leadership position in managed security services that protect.
Under the terms of the agreement, approximately 2,450,000 unregistered shares of ISS Group stock will be issued for all of the outstanding stock of Netrex. There is a commitment to register up to 28 percent of the shares being issued in this transaction in a filing with the Securities and Exchange Commission in the near future. Additionally, options outstanding under the Netrex option plan will be assumed under the ISS Stock Option Plan. The pooling-of-interest transaction makes the deal worth $57 million.
Netrex and its ePatrol software will form a new ISS eServices unit aimed to fill the managed security services market for the protection of corporate e-commerce programs. The market is expected to increase to $1.3 billion in 2002, according to the company's release.
Charles Meyers, most recently ISS Vice President of Corporate and Business Development, will lead the new ISS eServices team as its Vice President and General Manager.