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Herndon, N.Y. Cyber-Security Firms to Merge

By Ellen McCarthy
Washington Post Staff Writer
Tuesday, September 21, 2004; Page E05

TruSecure Corp., a Herndon provider of network security systems, agreed to merge with Betrusted Holdings Inc., a New York company that offers similar services.

Financial terms of the all-stock deal, which is set to be announced today, were not disclosed.

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The combined company is to be renamed Cybertrust, and its headquarters will be in Herndon. It will have about 1,000 employees and $160 million in annual revenue, company executives said.

One Equity Partners LLC, the venture capital arm of J.P. Morgan Chase & Co.'s Bank One, owns Betrusted and will be the majority stakeholder in Cybertrust.

The combined company will sell intrusion detection technologies, firewall application management systems and consulting services to business clients.

"Betrusted was more centered around letting the good guys in. . . . We're helping keep the bad guys out," said John C. Becker, chief executive of TruSecure who will maintain that position at the merged company. Rick Smith, chairman of Betrusted, will become Cybertrust's chairman.

Betrusted was founded in 1999 as a security spinoff of PricewaterhouseCoopers. In February 2003, One Equity Partners acquired the company for an undisclosed amount. In July 2003, the company acquired an Australian security company, SecureNet Ltd., for $109 million and throughout the following year gobbled shares in the Belgian security firm Ubizen NV. It now owns about 90 percent of Ubizen.

Betrusted's funders have pumped more than $200 million in venture capital into the company.

TruSecure has raised more than $50 million over its 15-year history from investors including Weston Presidio Service Co., known as Weston Presidio Capital, and Greylock Management Corp.

Becker said some administrative personnel may be laid off, but he expects less than 10 percent of the overall staff to be cut.

The deal includes an undisclosed amount of new funding, he said, adding that the company would not rule out an initial public offering in the future. "We will use all the appropriate strategies to grow a large business," Becker said.

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