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NetScreen Buying VPN Firm For $245M

NetScreen has bid $245 million in stock and $20 million in cash for Neoteris.
In the largest deal in the security market since 2001, NetScreen TeIn the largest deal in the security market since 2001, NetScreen Technologies Inc. is buying Neoteris Inc. for $245 million in stock and $20 million in cash, including assumption of all outstanding Neoteris options. The deal is expected to close by year's end.

Upon the achievement of certain revenue milestones, NetScreen would pay Neoteris stockholders and option holders up to an additional $30 million in cash.

The deal would allow NetScreen to complement its current Internet Protocol security (IPsec)-based network security hardware offerings with Neoteris's enterprise-class secure sockets layer VPN remote-access technology.

"While IPsec is the best technology for site-to-site VPN deployments, we believe Neoteris' advanced SSL VPN solutions will become the preferred solution for new, and expansion of existing, remote-access deployments," said Robert Thomas, president and CEO of NetScreen.

"This acquisition will not only strengthen our portfolio of end-to-end security offerings, it will allow us to drive adoption of SSL VPN technology as the preferred option for remote-access deployments and position NetScreen for success in this growing market," he added.

With a product lineup that would span enterprise site-to-site, employee remote-access, and partner extranet communications, NetScreen is positioned to target the emerging SSL-based remote access market, which research firm Infonetics Research estimated will exceed $600 million by 2006.

Neoteris has more than 550 customers, including large enterprises and organizations such as Borland Software, Deutsche Bank, and SAS, as well as approximately 1 million global users. Krishna "Kittu" Kolluri, president and CEO of Neoteris, will join NetScreen as general manager responsible for NetScreen's secure-access products.

In addition to its SSL VPN solutions, Neoteris' application security gateways would give NetScreen new access-management functionality, including the ability to implement forms- and header-based Web single sign-on, password-management integration, and cross-enterprise online meeting functionality. n stock and $20 million in cash, including assumption of all outstanding Neoteris options. The deal is expected to close by year end.

Upon the achievement of certain revenue milestones, NetScreen would pay Neoteris stockholders and optionholders up to an additional $30 million in cash.

The deal would allow NetScreen to complement its current Internet Protocol security (IPsec)-based network security hardware offerings with Neoteris's enterprise-class secure sockets layer (SSL) virtual private network (VPN) remote-access technology.

"While IPsec is the best technology for site-to-site VPN deployments, we believe Neoteris' advanced SSL VPN solutions will become the preferred solution for new, and expansion of existing, remote access deployments," said Robert Thomas, president and CEO of NetScreen.

"This acquisition will not only strengthen our portfolio of end-to-end security offerings, it will allow us to drive adoption of SSL VPN technology as the preferred option for remote access deployments and position NetScreen for success in this growing market," he added.

With a product lineup that would span enterprise site-to-site, employee remote-access, and partner extranet communications, NetScreen is positioned to target the emerging SSL-based remote access market, which research firm Infonetics Research estimated will exceed $600 million by 2006.

Neoteris currently has more than 550 customers, including large enterprises and organizations such as Deutsche Bank, Borland Software Corp. and SAS as well as approximately 1 million global users. Krishna "Kittu" Kolluri, president and CEO of Neoteris, will join NetScreen as general manager responsible for NetScreen's secure access products.

In addition to its SSL VPN solutions, Neoteris' application security gateways would give NetScreen new access management functionality, including the ability to implement forms- and header-based Web single sign-on, password management integration and cross-enterprise online meeting functionality.