Check Point Software buying firewall vendor Zone Labs

Seeking to expand its product offerings, network security vendor Check Point Software Technologies is acquiring firewall software company Zone Labs for US$205 million.

The deal, which was announced Monday, will add end-user firewall tools to Check Point's family of products and bring Check Point more than 25 million customers, according to the companies. More than 200 Zone Labs employees will move to Check Point's workforce. Both companies' headquarters are in the US.

Check Point will pay about $113 million in cash and about $92 million in shares for Zone Labs and will also assume employee stock options of Zone Labs, which could convert to approximately 2.9 million Check Point shares. The merger agreement has been approved by the boards of directors of both companies. The deal, which is expected to close in the first quarter of 2004, still needs approval from Zone Labs shareholders and from federal regulators. Zone Labs will operate as a division of Check Point after the acquisition.

Gil Shwed, chairman and CEO of Check Point, said in a statement that Zone Labs' ZoneAlarm and Integrity product lines complement Check Point's vision and SecureClient VPN/security products and will allow better integration of the companies' applications for users.

"Both companies share a deep commitment to customers, and this acquisition will enable us to deliver the industry's most comprehensive end-to-end Internet security to all types of customers -- from consumers to the largest enterprises," Shwed said.

Gregor Freund, CEO and co-founder of Zone Labs, said in a statement that Check Point's "commitment to Zone Labs' products, partners and customers were paramount in making this decision."

"Our common vision will result in the most complete and manageable security solution to protect the fastest-growing, most vulnerable segment -- network endpoints," he said.

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