Continuing its acquisition spree, Network Associates Inc, the Santa Clara-based maker of network security software, is to make a friendly all-cash offer of $130m to buy fellow Californian company CyberMedia Inc, an offer which represents a premium of some 25% over Monday’s closing price. The Santa Monica-based creator of the First Aid self-healing diagnostic software for the Windows environment described the takeover as a ‘tactical rather than strategic’ acquisition, according to Network Associates CEO, Bill Larson. His company, which came into existence last year as a result of the merger between Network General and McAfee Associates Inc, plans to merge the CyberMedia business into its newly created McAfee Software Division, which will handle the retail side of its business. The latter currently represents no more than 10% of Network Associates’ over-all sales, and Larson does not expect that situation to change even with CyberMedia, which reported just $5.8m of revenues in the second quarter (down from $20.4m in the same period last year). The logic behind the acquisition is that the company will be embedding First Aid and UnInstall into its own Total Service Desk Suite of products, as well as gaining greater market visibility via CyberMedia’s well known shrink-wrapped packages, which include Guard Dog and Oil Change. CyberMedia has had a troubled year, during which sales have plummeted while its stock price has halved. With CFO and CEO resigning in February and March respectively, the company brought former Novell executive Kanwal Rekhi out of retirement to serve as its troubleshooter. CyberMedia took a $28.1m net loss in the first half on revenues of $10.5m. Network Associates, meanwhile, reported a net loss in the first half of $101m on revenues of $212m, but that was after $151m of charges incurred in a string of previous acquisitions it has made this year. These include: high-end security software vendor Trusted Information Systems Inc, purchased via a $300m stock swap in February; automated help desk software company Magic Solutions Inc, for which it paid $110m in March; the $25m Secure Networks Inc, a provider of secure scanning technology, acquired in May, and, most recently, British anti-virus vendor Dr Solomon’s Group Plc, for which it paid $642m last month.
