Symantec To Buy 3 Security FirmsSymantec To Buy 3 Security Firms

SAN JOSE, Calif. - Symantec Corp., a leading Internet security firm, announced plans Wednesday to acquire three other security firms for $355 million in cash, placing itself in a powerful position in a competitive and fast-growing market.

In a move that substantially broadens its product portfolio, Cupertino-based Symantec is acquiring SecurityFocus Inc. for $75 million; Recourse Technologies Inc. for $135 million; and Riptech Inc. for $145 million. All three are privately held firms.

"Security is the No. 1 thing that people want, and these acquisitions move Symantec clearly into the No. 1 spot," said Rob Enderle, analyst with the Giga Information Group. "Now people can use Symantec as a one-stop shop for security services."

SecurityFocus, a San Mateo-based company, is a top repository for computer software and network vulnerabilities, and hosts Bugtraq, a Web forum devoted to programming errors.

Recourse, based in Redwood City, provides high-speed network intrusion technology that detects, analyzes, and responds to computer attacks, such as the damaging "Code Red" and "Nimda" worms that spread across the Internet last year and infected nearly 1 million servers.

Riptech, founded in 1998 by Department of Defense security experts, is a provider of network security services based in Alexandria, Va.

With the acquisitions, Symantec officials said they hope to offer customers--which include government agencies and corporations--comprehensive early warning systems across the broadest range of threats.

If the acquisitions pass regulatory approval, the deals are expected close in mid-August, the company said.

After the stock markets closed Wednesday, Symantec also reported fiscal first-quarter results that far exceeded Wall Street expectations, boosted by strong consumer sales in anti-virus software.

For the three months ended June 30, the company said it earned $56.6 million, or 36 cents per share, compared to a net loss of $21.2 million, or 14 cents a share, from the year-ago period. Revenues were $316 million, up 39 percent from $228 million from the year-ago period.

Excluding one-time charges, Symantec posted a pro forma net income of $65.6 million, or 41 cents a share, compared to earnings of $33.9 million, or 22 cents a share from the year-ago period.

Analysts polled by Thomson Financial/First Call forecast earnings of 32 cents a share on revenues of $284 million.

Shares of Symantec closed Wednesday up 33 cents to $33.10. In extended trading, shares fell $1.55, or nearly 5 percent, to $31.55.