SAN JOSE, Calif., Jan 12, 2006 (BUSINESS WIRE) -- Secure Computing Corporation (NASDAQ:SCUR), the experts in securing connections between people, applications and networks(TM), today announced it has completed its merger with CyberGuard Corporation (NASDAQ:CGFW), a global provider of security solutions that protect the critical components of the largest and most complex information networks for Global 2000 enterprises and government organizations.

The merger creates a new leading IT security provider, which has a combined customer base of over 17,000 customers and 1,300 resellers worldwide, with distribution channels extending across more than 100 countries.

"We believe that CyberGuard is a perfect fit for Secure Computing, as it accelerates the company's strategic vision and better positions us in the two fastest growing segments of the security industry," said John McNulty, chairman, president, and CEO of Secure Computing. "By combining the two companies, Secure Computing is the new market leader in the Unified Threat Management (UTM) market, the fastest growing segment of the IT security market according to IDC. This merger also accelerates our position in the Secure Content Management (SCM) market, and clearly positions Secure Computing as the number two player in web filtering with approximately 21 million licensed seats."

McNulty continued, "Going forward, we will leverage our complementary technologies and channel partnerships, and gain additional important competitive advantages in the market."

On January 11, 2006, Secure Computing stockholders approved the issuance of shares of Secure Computing common stock to the holders of shares of CyberGuard common stock in connection with the merger at Secure Computing's special meeting of stockholders. Also on January 11, 2006, CyberGuard stockholders voted to approve the merger agreement and the merger between the two companies. Effective immediately, CyberGuard will become integrated into Secure Computing and the CyberGuard ticker symbol, CGFW, will be removed from the NASDAQ listing before tomorrow's opening of market.

In connection with the merger, Richard L. Scott, a member of CyberGuard's board of directors, and Cary J. Davis, a Warburg Pincus managing director, are being added to Secure Computing's Board of Directors.

At its special meeting, Secure Computing stockholders also approved two additional proposals: (i) the issuance of shares of Secure Computing Series A preferred stock and a warrant to purchase shares of Secure Computing common stock to Warbug Pincus Private Equity IX, L.P. and (ii) amendments to the Secure Computing amended and restated 2002 Stock Option Plan to increase the number of plan shares by 1,500,000, among other changes.

In connection with this transaction, Warburg Pincus, the global private equity firm and a leading investor in technology companies, will invest $70 million in Secure Computing in the form of convertible preferred stock with warrants. The preferred stock will be convertible at $13.51 per share, representing an 11 percent premium to the closing price of Secure Computing's common shares on August 17, 2005, and will include a 5 percent dividend which shall be paid-in-kind for the first 4.5 years and thereafter may be paid in cash, at the option of Secure Computing. Warburg Pincus will also receive 1.0 million warrants to purchase Secure Computing common stock at a price of $14.74, representing a premium of 21 percent to the closing price of Secure Computing's common shares on August 17, 2005. The convertible preferred stock is not redeemable but may be converted to common at any time by Warburg Pincus and after one year by Secure Computing subject to the achievement of certain share price performance milestones. This investment will close concurrent with, and is contingent upon, the closing of the CyberGuard transaction.