Memco Software Ltd of Israel is in the process of buying two companies at a value of $55m. Memco provides solutions for information security in organizational settings. The two target companies are AbirNet of Israel and Network Information Technology Inc of the US. AbirNet was founded in 1996 and employs 35 staff. It specializes in systems that check of signs of hostile activity from outside the company as well as keeping tabs on unauthorized access of the internet from within a company network. The company will be bought for $27.5m, $16.2m in shares and the remainder in cash in a deal that is expected to close next month. AbirNet is 46% owned by its founder Ziv Descalu. Apart from two other private investors who account for 15% of the company, a number of other investors provided $2.5m in a private placement last year, including the Gemini and Walden venture capital funds as well as Check Point. Company sales are so far insignificant. NIT employs just 17 people and produces a system which works alongside Memco’s SeOS central product line. The company was also bought for $27.5m in a deal that closed yesterday, but the total amount will be on a non-cash share- transfer basis. Memco reported its first quarter results last week, posting a 30% drop in revenues in relation to the fourth quarter of last year. Memco finished the quarter with revenues of $8.4m, and a net profit of $2.1m. Memco chief executive Israel Mazin claimed the drop in revenue was seasonal and expected by the company and analysts alike.
