McAfee takes Secure Computing out

McAfee wants to make sure it remains the biggest "pure play" security vendor.  One of the larger public pure play's in security, Secure Computing is the latest competitor that McAfee is taking off the board.  They have agreed to buy Secure for $5.75 a share.  This is quite a premium over the 3.50 to 4.50 range that Secure has been trading in prior to the deal.  For me though the Secure stock price was not indicative of Secure's true value.  I think it was much less. 

I think Secure Computing never really recovered from its acquisition of CyberGuard.  It never really hit its stride and made the expected for progress after that deal.  Yes it continued to acquire businesses, but mostly these were bottom feeding type of deals and didn't add a lot of quality to the mix.  Secure's most recent acquisition of Securify was a perfect example.  They bought a stagnant growth company doing about 12 million for 15 million, but what to do with it?  It seemed that they were just looking to pile up revenue with no real thought to how these all fit together. 

In any event, now it is McAfee's problem.  I like Secure's firewall product line and I think that is something McAfee does not have.  As for the rest of the portfolio, it remains to be seen what if any value McAfee will find in it.  In the meantime, security consolidation marches on.

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