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Secure Computing to buy CyberGuard

Deal is expected to close in the fourth quarter, creating a company with 680 employees and a presence in 90 countries.

Secure Computing has announced plans to acquire competitor CyberGuard in a deal valued at $295 million.

The agreement, announced Thursday, is designed to bolster Secure Computing's presence in unified threat management--the market for tightly integrated solutions that cover functions such as anti-spyware, firewall protection and intrusion detection. The company, which sells a mix of hardware and software, is also aiming to strengthen its position in the market for products that secure content that flows through a network.

"By combining the companies, Secure Computing will be the leader in the unified-threat-management market, the fastest-growing segment of the IT security market," John McNulty, chief executive of San Jose, Calif.-based Secure Computing, said in a statement.

The companies noted that the deal will let them integrate their application proxy firewall technologies, as well as their Web-filtering offerings.

Secure Computing will issue 0.5 shares of its common stock and $2.73 in cash for every outstanding share of CyberGuard, which is based near Tampa, Fla. The deal represents a 16 percent premium over CyberGuard's shares. Warburg Pincus, a private equity firm, will also invest $70 million into Secure Computing as part of the deal.

The acquisition is expected to close in the fourth quarter. The combined company will have 680 employees and a presence in 90 countries.

The deal is just the latest marriage in the rapidly consolidating security market. Industry giant Symantec closed its acquisition of Veritas earlier this year, and Network Appliance announced plans to acquire data security specialist DeCru this summer.