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Two Security M&A Transactions – Permeo and IMLogic

There were two security transactions announced today. There has already been tons written about them online, but I am just adding my two cents about IMLogic and Permeo.

Blue Coat bought Permeo Technologies. A brief description of the deal is available here courtesy of the Permeo website. Blue Coat paid about $60.8 million for Permeo’s endpoint security technology. The acquisition itself is not particularly noteworthy — there are plenty of people looking to get into the endpoint security game, namely Juniper buying Funk, Cisco’s NAC initiative and Perfigo acquisition, and the various initiatives that Checkpoint has going on with Zone. What makes this acquisition potentially interesting is that Blue Coat is by no means a heavyweight in networking or security like a Cisco, Juniper, or Checkpoint. Based on what I can gather, the company only had about $60 million in cash and cash equivalents at the end of the quarter ending in October 2005. This is a big chunk of change for a small company to pay to add an acquisition. I can only assume that Blue Coat had a lot of customers who were clamoring for some form of endpoint security for them to make this purchase. This also gives some hint that the interest in endpoint security is fairly broad across the networking and security sector.

Symantec buys IMLogic. Way back when I was in venture, we looked at all of the companies in this space. Facetime and IMLogic really stood out as two companies that were on to something interesting. The only question was when (and perhaps if) the market would recognize the security risks associated with instant messaging and spend dollars to address the problem. I am curious to see how successful Symantec is in its efforts to integrate this technology and sell it to its customer base. I am also interested to see how Facetime and others in this space react — security tends to be a space where acquisitions follow a domino effect once the first company gets snapped up.