On November 30, 2011, McAfee completed its acquisition of privately owned NitroSecurity, a leading provider of security information and event management (SIEM) solutions that provide complete visibility and situational awareness to protect critical information and infrastructure. NitroSecurity’s solutions use a patented database engine to identify, correlate, and remediate threats faster than any other technology on the market. The acquisition enables McAfee to provide organizations with greater visibility into endpoint assets, network infrastructure, specific security threats and risks, and system vulnerabilities across the entire IT environment — via a single management platform.

SIEM technology provides real-time analysis of security alerts generated by network hardware, system events, and applications, and is used to log security data and generate reports for compliance purposes. NitroSecurity is a member of the McAfee Security Innovation Alliance and its SIEM technology has already passed integration testing with the McAfee ePolicy Orchestrator (McAfee ePO) management console. The addition of NitroSecurity’s SIEM solutions will further expand the capability of the McAfee ePO management console to view events, activity, and logs created by networks, databases, and applications, helping customers take immediate, decisive action to address threats and vulnerabilities.

The integration of NitroSecurity’s SIEM technologies into the McAfee product family will enable enterprises to:

• Use a single platform for event analysis and management
• Quickly identify, correlate, and remediate threats, mitigating risks to information and infrastructure
• Analyze forensic log and event data created by networks, databases, and applications
• Institute a range of monitoring and mitigation actions, such as issuing new configurations, implementing new policies, and deploying software updates

The acquisition of NitroSecurity gives McAfee a strong foothold into the rapidly growing SIEM market, which hit $987 million in 2010 according to Gartner, and expands McAfee’s opportunity in the risk and compliance market. “McAfee is focused on keeping customers safe with optimized security and risk management solutions,” said Stuart McClure, general manager and senior vice president of the Risk and Compliance business unit at McAfee. “With NitroSecurity’s technology and talent, McAfee can expand its reach into new markets, secure new platforms, and strengthen its hold as the leader in the security risk management market.”

NitroSecurity’s technologies are a natural fit with the McAfee security portfolio. “NitroSecurity’s technology supports a broad range of information sources, including network security devices, firewalls, operating system and application logs, vulnerability assessment scans, identity and access management systems, and privacy systems. It will complement the extensive McAfee security portfolio and help to meet the demanding compliance and protection needs of our joint customers,” said Ken Levine, chairman and chief executive officer of NitroSecurity.

IdentityTruth

AUSTIN, Texas – April 11, 2011 – CSIdentity Corporation, the industry’s leading provider of wholesale identity theft protection and fraud detection solutions, has successfully completed its acquisition of IdentityTruth, Inc., a privately-held company based in Waltham, Massachusetts. The acquisition complements CSIdentity’s industry leading product and service offerings by adding the IdentityTruth® proprietary technology and analytics to its product set.

“Our clients and business partners have to constantly stay ahead of the evolving challenges posed by identity theft and fraud,” said Joe C. Ross, president of CSIdentity.  “IdentityTruth’s powerful identity theft scoring and prediction technology bolsters our market-leading product portfolio and keeps us at pace with the growing demand for new and innovative identity theft protection solutions.”

Transaction Details

CSIdentity funded the acquisition of IdentityTruth® with cash from existing profits and funds from Investcorp Technology Partners, its anchor investor. “IdentityTruth represents a logical extension of CSIdentity’s product portfolio and will make a significant contribution to the high growth trajectory CSIdentity is operating on,” said Alex Guira, co-head of Investcorp Technology Partners.

CSIdentity now employs more than 80 employees in Austin, Texas, San Diego, California and Waltham, Massachusetts and has a growing technology and patent portfolio unmatched by other identity theft solution providers.

Boston Meridian served as the financial advisor to IdentityTruth®.

Growing Demand

According to 2010 studies, over 11 million Americans, including many children, have had their identities stolen. Studies have shown that 88 percent of global organizations have had a data breach, with one to three breaches occurring daily. U.S. related losses due to identity theft and fraud are estimated to be over $54 billion.

The acquisition of IdentityTruth® responds to growing demand and propels CSIdentity into a clear market leadership position in the wholesale identity theft protection and fraud detection industry.

Enhanced Product Portfolio

The company’s comprehensive suite of identity theft solutions targets all aspects of identity theft and fraud through products including:

• Identity Monitoring – credit and non-credit reports, scores and alerts

• Breach – security breach services ranging from discovery to resolution

• Restoration – full service identity theft restoration services including limited power of attorney

• Platform Solutions – end to end private labeled identity theft protection platform solutions

• VoiceVerified®, a patented voice biometric identity verification system

IdentityTruth’s® Identity HealthScore adds to this suite of valuable solutions by providing a dynamic method of gauging individual risk for identity theft or fraud.  IdentityTruth’s® proprietary system constantly receives and analyzes data from multiple sources to build a complete identity profile for an individual. Sophisticated fraud detection algorithms then evaluate a person’s risk for fraud schemes and reports suspicious activity such as an unrecognized address or a newly issued phone number.

All of the company’s solutions are sold on a wholesale basis through CSIdentity’s proprietary platforms to other businesses in the identity theft space and other key vertical markets.

About CSIdentity Corporation

CSIdentity is the technology leader in delivering, on a wholesale basis, Identity Theft Protection, Fraud Detection, Voice Biometrics, ID Verification, and Data Breach Management and Restoration Services. The company offers a comprehensive suite of business and personal security solutions targeting all aspects of identity theft. Products include full-service identity theft protection and fraud detection services, identity monitoring and alerts, voice biometrics, comprehensive background screenings, and pro-active breach management services from pre-planning, discovery and restoration.

Boston Meridian Merchant Banking wants to carve a deeper niche in New England tech advisory.

The eight-year-old firm is the brainchild of J.C. Raby and John P. Siracuse, both veterans of Boston’s technology scene. “We looked out in the world and said a third of the Nasdaq doesn’t have research coverage,” Raby recalls. “We’re pretty sure they’re not going to have quality M&A advice because bulge-bracket M&A advisers usually rely on a research arm to source ideas.”

Boston Meridian, located about 23 miles south of Boston in Mansfield, Mass., employs seven, including four partners, and focuses on the “sub-$300 million market.” Its average transaction size is around $50 million.

Raby, 39, had been a senior executive for San Francisco tech bank Thomas Weisel Partners (now Stifel Financial Corp.), where he ran the firm’s Boston investment banking group. Siracuse, 45, had been a managing director at San Francisco’s Robertson Stephens, where he led its East Coast software, Internet banking and financial sponsors group. (Robbie Stephens was shuttered by parent FleetBoston Financial in July 2002.) A month after Boston Meridian was founded, in November 2003, Raby tapped a former teammate from his college crew team and longtime colleague, Garrett Palm, 39, who became principal and COO.

“We mostly deal with growth companies,” Raby says. “Most of our clients are growing quickly. Most of the businesses have at least $10 million in revenue or more.”

The firm averages three to five deals a year, mainly M&A and capital raising, though it also provides valuation and fairness opinion services. 2010 brought four deals, and there’s been one in 2011. Boston Meridian recently advised Milpitas, Calif., network security business Pari Networks when it was acquired by Cisco Systems Inc. for undisclosed terms, and it organized a $14 million Series A round of venture funding for cloud-computing software company Adaptive Computing Enterprises Inc. of Provo, Utah, closed Sept. 14. Intel Capital, Intel Corp.‘s investment arm, served as the lead on that deal, with Tudor Ventures, the private equity and VC unit of Tudor Investment Corp., and Epic Ventures.

Observers emphasize how important it is for advisers to master the technology ecosystem. John J. Egan III, partner and co-chair of Goodwin Procter LLP‘s technology companies group, emphasizes that tech companies need to think hard about which original equipment manufacturers they agree to partner with. “OEMs, you know, are going to be the most natural buyers,” he says. “If you partner with the right people, you can drive a more valuable acquisition. With the wrong partner, you can actually discourage people from bidding on you.”

“If you take your large OEM today, most of them actually exist to buy companies versus develop and launch organic products,” notes Raby. “Their value is to have a 5,000-person sales force as a distribution arm.”

Boston Meridian does a healthy chunk of work outside New England — 25% of its deals involve an international party or component from abroad. Much of the Pari deal was driven out of Hyderabad, India. Raby notes, however, that New England is still a vital part of the U.S. economy. “It’s where a lot of the technology and innovation still happens. A lot of venture capital and private equity dollars are invested or emanate [from here],” he says. The area’s academic institutions are fertile grounds for budding entrepreneurs.

“There’s great technology innovation coming out of the schools like the Massachusetts Institute of Technology. There’s great management talent obviously coming out of the business schools like Harvard,” he says.

Adds Egan, “I think some of the [subsectors], like security and mobile, continue to be very strong.”

Raby notes that vibrant tech entrepreneurship extends to New York and Washington, where the focus tends toward e-commerce, digital advertising and communications. “Innovation on the East Coast generally happens in the New York, Boston, Washington corridor,” Raby says. “We’re down in New York for many e-commerce-type of initiatives and in D.C. for many software and communications equipment opportunities.”

Raby notes that many e-commerce shops in New York head to Boston “to get their checks filled. There’s a smaller pocket of venture money in New York.”

New England trails only Silicon Valley in venture capital resources — in fact, Raby is looking for partners for a new office in the Valley.

“That’s why you see a lot of firms like ours with a Boston and Northern California presence. Boutique tech firms tend to follow the money,” he says.

Large investment banks have scant economic interest in banking small and midcap companies, Raby says, adding that his partners typically handle every deal the firm takes on as a unit. “You may have a sub-$200 million sale, so it doesn’t fit their economic model because they can’t get the fee basis that they want from that type of deal. They have big overheads to sustain. They’d rather keep their best deal teams doing $2 billion deals.”

Tech advances should continue to drive middle-market deals. “There was the evolution from mainframes to client servers, there’s the evolution of PCs. I think the whole cloud-computing thing is really going to take off,” says Egan.

“We’re entrepreneurs just like our clients,” says Raby. “Every deal we take on has to be one we get done.”

In addition to advanced technology, Pari Networks brings to Cisco an industry-leading team of engineers that will continue to build out and strengthen Cisco’s smart service capabilities.  Cisco and its partners have been evolving service offerings from reactive to proactive by embedding smart service capabilities throughout professional and technical services.

Financial terms of the transaction are undisclosed. With the close of the acquisition, Pari Networks employees become part of Cisco’s Technical Services.

The M&A market for venture-backed companies is showing signs of life in Massachusetts.

Eight VC-backed technology companies have announced exits by merger and acquisition so far in the third quarter. With the quarter half over, that puts the state on pace to double the eight deals posted for the New England region in the second quarter, and more than double the seven deals posted in last year’s third quarter.

Parties to six of the seven deals since then have not announced terms — but only one, the Aug. 6 deal for Waltham casino game technology developer GameLogic Inc., appears to have been an asset acquisition. Other acquisition targets in the quarter have been, for the most part, healthy companies — either growing fast, or established and profitable.

While bargain-basement shopping may be over, many of the current batch of M&As likely represent “portfolio-cleaning” by VCs hanging on to their home-run investments, said JC Raby, co-founder and partner at Mansfield M&A advisory investment bank Boston Meridian LLC. Valuations now are typically at multiples of three or four over the valuation at which VCs invested, he said.

“Valuations will still be kept down by the real estate effect,” Raby said. “Someone sells a house cheaply on your block, it’s going to have residual effect on your ability to achieve (a good) valuation.”

Buyers have not shied away from spending big. The quarter kicked off with the announcement of Google Inc.’s (Nasdaq: GOOG) $700 million acquisition of ITA Software Inc. Soon after, Ingenix, a subsidiary of Minnesota-based UnitedHealth Group Inc. (NYSE: UNH), announced a deal for 700-employee health IT firm Picis Inc., based in Wakefield. Terms were not disclosed.

“It was a very good deal for our shareholders,” said Picis CEO Todd Cozzens. Picis had been posting $140 million in revenue and was re-entering the IPO process. The company filed in 2007, then withdrew a year later. Talk of a renewed IPO touched off interest from potential acquirers, he said.

The market for initial public offerings is normally a driver for M&A, as strategic acquirers hustle to snap up viable companies before they go public. However, this year the IPO pipeline is swollen to near-record size, and the few tech companies that have made it out so far have gotten lackluster pricing for their trouble.

“This was an opportunity we’ve been talking about (for) a year,” said CEO Colin Doherty of Chelmsford-based Arbor Networks Inc. The 275-employee company sold to Danaher Corp. (NYSE: DHR) subsidiary Tektronix Communications this week for undisclosed terms. “The discussions got to the point where this just made a lot of sense for us.”

For Texas-based Tektronix, the deal represents an entree into network security, and the chance to build a presence in the Northeast, said Senior Vice President Richard McBee.

Since early this year, VCs have been pointing optimistically to huge cash amounts piling up on the balance sheets of acquisitive tech giants like Danaher. But General Catalyst Partners Managing Director Joel Cutler disagrees. Cutler led the Cambridge firm’s investments in ITA, as well as Bedford airport security company Reveal Imaging Technologies Inc., which is set to exit by M&A this quarter.

“There are talent pools that they’re buying. … In other deals they’re buying fast growth in smart markets. he said. “The idea that there’s money burning a hole in somebody’s pocket is probably faulty.”

Source: Mass High Tech

The M&A market for venture-backed companies is showing signs of life in Massachusetts.

Eight VC-backed technology companies have announced exits by merger and acquisition so far in the third quarter. With the quarter half over, that puts the state on pace to double the eight deals posted for the New England region in the second quarter, and more than double the seven deals posted in last year’s third quarter.

Parties to six of the seven deals since then have not announced terms — but only one, the Aug. 6 deal for Waltham casino game technology developer GameLogic Inc., appears to have been an asset acquisition. Other acquisition targets in the quarter have been, for the most part, healthy companies — either growing fast, or established and profitable.

While bargain-basement shopping may be over, many of the current batch of M&As likely represent “portfolio-cleaning” by VCs hanging on to their home-run investments, said JC Raby, co-founder and partner at Mansfield M&A advisory investment bank Boston Meridian LLC. Valuations now are typically at multiples of three or four over the valuation at which VCs invested, he said.

“Valuations will still be kept down by the real estate effect,” Raby said. “Someone sells a house cheaply on your block, it’s going to have residual effect on your ability to achieve (a good) valuation.”

Buyers have not shied away from spending big. The quarter kicked off with the announcement of Google Inc.’s (Nasdaq: GOOG) $700 million acquisition of ITA Software Inc. Soon after, Ingenix, a subsidiary of Minnesota-based UnitedHealth Group Inc. (NYSE: UNH), announced a deal for 700-employee health IT firm Picis Inc., based in Wakefield. Terms were not disclosed.

“It was a very good deal for our shareholders,” said Picis CEO Todd Cozzens. Picis had been posting $140 million in revenue and was re-entering the IPO process. The company filed in 2007, then withdrew a year later. Talk of a renewed IPO touched off interest from potential acquirers, he said.

The market for initial public offerings is normally a driver for M&A, as strategic acquirers hustle to snap up viable companies before they go public. However, this year the IPO pipeline is swollen to near-record size, and the few tech companies that have made it out so far have gotten lackluster pricing for their trouble.

“This was an opportunity we’ve been talking about (for) a year,” said CEO Colin Doherty of Chelmsford-based Arbor Networks Inc. The 275-employee company sold to Danaher Corp. (NYSE: DHR) subsidiary Tektronix Communications this week for undisclosed terms. “The discussions got to the point where this just made a lot of sense for us.”

For Texas-based Tektronix, the deal represents an entree into network security, and the chance to build a presence in the Northeast, said Senior Vice President Richard McBee.

Since early this year, VCs have been pointing optimistically to huge cash amounts piling up on the balance sheets of acquisitive tech giants like Danaher. But General Catalyst Partners Managing Director Joel Cutler disagrees. Cutler led the Cambridge firm’s investments in ITA, as well as Bedford airport security company Reveal Imaging Technologies Inc., which is set to exit by M&A this quarter.

“There are talent pools that they’re buying. … In other deals they’re buying fast growth in smart markets. he said. “The idea that there’s money burning a hole in somebody’s pocket is probably faulty.”

Source: Mass High Tech

TripAdvisor LLC’s $200 million acquisition by InterActiveCorp (Nasdaq: IACI) was a home run by any VC’s measure: Flagship Ventures and a handful of angels had put in $4.5 million. Five years later, that is not the number co-founder Stephen Kaufer is thinking about.

There are better numbers for the TripAdvisor CEO to focus on, like the $212 million the company, now a subdivision of Expedia Inc., generated in 2009 — over five times its sales in 2005. TripAdvisor now employs 750 worldwide — 350 to 400 of them in and around its Boston headquarters — and plans to hire 100 globally through the end of 2011. In 2005, the company headcount was 35.

A few years later (also in April), BMC Software Inc. (Nasdaq: BMC) bought BladeLogic, a Lexington company making data center management software. The 2008 acquisition, worth $834 million in cash, brought about 190 Lexington-based BladeLogic employees into BMC. According to the company, most of them are still there, and the headcount in Lexington has grown to 225. CEO Bob Beauchamp said on the strength of multiple quarters of double-digit growth in BladeLogic, BMC is planning to hire more. According to BMC’s annual report, BladeLogic produced at least $75 million in revenue for the company in 2009.

But BladeLogic and TripAdvisor took divergent paths to growth after acquisition. In TripAdvisor’s case, the company’s buyers have interfered little with the machine that has at times in its history thrown off half its revenue in cash, and giving Kaufer broad discretion to make acquisitions and run the company as he sees fit.

“We were lucky enough to land at IAC, which could be considered a holding company back then,” Kaufer said. “We were just one of a bunch of businesses, and we were left to run very independently. We continued to prove our worth by growing on our own.”

BMC, however, has made BladeLogic part of a broad strategy for cloud computing that the company conceived before the acquisition, using its new subsidiary as an engineering center for new initiatives in that area. Scott Fulton, who heads engineering for the BladeLogic division, came to BMC five months before the acquisition to manage the deal and the R&D efforts the company planned to build on top of it.

“BladeLogic was kind of a cornerstone, anchor acquisition to go into a broader category that we call service automation,” Fulton said.

BMC is aiming its BladeLogic R&D assets at new demands from enterprise customers, who are looking to support development of private clouds that can match the speed, scalability and self-service capabilities of public services like Amazon’s EC2.

Businesses are looking to let non-IT employees provision new servers, and do so quickly. Traditionally, the fastest an IT administrator could set up a server with firmware, operating systems, middleware and a database would be two hours.

“Customers are going to want that in 20 minutes,” Fulton said. “(IT administrators) can go out to Amazon and get that in 20 minutes. If an enterprise wants to have a private cloud, they need to match that.”

For companies planning aggressive growth, a merger with a larger, more established business can be a better means to finance growth than strategies to preserve a measure of independence — like venture investment or an initial public offering, said JC Raby, co-founder and managing director at Mansfield M&A advisory Boston Meridian.

That’s particularly true, he said, if there’s a market opportunity coming so fast and large that even a great deal of investment capital wouldn’t be enough to take advantage of it in time.

“You realize that even if you took in investment capital you wouldn’t be able to scale up the infrastructure to take advantage of it,” Raby said. “If this market is really there in spades for me, I’m going to take in that capital and still not be able to turn that into a valuation enhancer.”

Since 2005, TripAdvisor has also grown by aquisition, composing an online travel portfolio that includes companies like virtualTourist and OneTime.com.

Small, but fast-growing and immensely profitable before its acquisition, TripAdvisor probably could have made those acquisitions on the strength of its own cash flow alone, Kaufer says. But Expedia’s size and clout helped the company establish itself in China, making an acquisition there and opening its own site.

“That would have been next to impossible without the much bigger, more established parent company,” Kaufer said.

Source: Mass High Tech

Provo, Utah—September 14, 2010—Adaptive Computing, the company behind the Moab_^® unified automation intelligence technology, today announced the completion of its Series A round of financing, securing $14 million from Intel Capital, which served as the lead investor, Tudor Ventures and EPIC Ventures.  Adaptive Computing’s initial round of funding, after nine years of consistent profitable growth as a company, will be used to further accelerate the company’s ability to meet the rapid increase in customer demand for cloud automation intelligence.

“As cloud computing demand has continued explosive growth, Adaptive Computing and its partners have applied Moab’s unique competitive advantage of upgrading static self-service cloud projects to rich self-optimizing or intelligent workload-driven clouds,” said Michael Jackson, COO and president of Adaptive Computing. “With an established global customer base and a cloud pipeline filled with opportunity, the new funding will enable the company to increase headcount and expand operations to meet the growing global demand.”

Adaptive Computing’s solutions, powered by Moab, deliver intelligent governance that allows customers to optimally consolidate and virtualize resources, allocate and manage applications, improve service levels, and reduce operational costs. Since Adaptive Computing’s founding in 2001 (as Cluster Resources Inc.), the company’s Moab products have managed the world’s largest computing installations and are the preferred intelligent automation solutions for the leading global data center vendors.

“Adaptive Computing’s solutions are well-positioned to play an important role upgrading enterprise data centers to intelligent, self-optimizing cloud environments,” said Steve Eichenlaub, managing director of Intel Capital. “Our investment in Adaptive Computing is consistent with Intel Capital’s belief that intelligent policy management will play a critical role in the next phase of cloud automation.”

“We are excited to work closely with Adaptive Computing to realize the tremendous opportunity in front of them. Cloud computing is a natural extension of the virtualization wave that is rapidly transforming enterprise data centers, and Adaptive Computing’s Moab product is a clear leader in intelligent cloud management software as evidenced by significant customer wins and its deep reseller and OEM partnerships,” said Jon Danielson of Tudor Ventures.

“While the first wave of cloud computing has been centered on virtualization, the next wave of managing the complexity of cloud-based workloads and resources is a much bigger problem to solve,” said Chris Stone, managing director of EPIC Ventures. “Adaptive Computing is the solution to taming this complexity, and we at EPIC Ventures are pleased to have the opportunity to make it a standard in the cloud computing market.”

About Adaptive Computing

Adaptive Computing provides intelligent automation software for HPC, data center and cloud environments. The company’s infrastructure intelligence solutions, powered by Moab_^®, deliver policy-based governance, allowing customers to consolidate and virtualize resources, allocate and manage applications, optimize service levels and reduce operational costs. Adaptive Computing products manage the world’s largest computing installations and are the preferred intelligent automation solutions for the leading global HPC and data center vendors. For more information, call Adaptive Computing at (801) 717-3700 or visit www.adaptivecomputing.com.

About Intel Capital

Intel Capital, Intel’s global investment organization, makes equity investments in innovative technology start-ups and companies worldwide. Intel Capital invests in a broad range of companies offering hardware, software, and services targeting enterprise, home, mobility, health, consumer Internet, semiconductor manufacturing and cleantech. Since 1991, Intel Capital has invested more than US$9.5 billion in over 1,050 companies in 47 countries. In that timeframe, 175 portfolio companies have gone public on various exchanges around the world and 241 were acquired or participated in a merger. In 2009, Intel Capital invested US$327 million in 107 investments with approximately 50 percent of funds invested outside the United States and Canada. For more information on Intel Capital and its differentiated advantages, visit www.intelcapital.com

About Tudor Ventures

Tudor Ventures is the venture capital and private equity arm of Tudor Investment Corporation, an internationally recognized, diversified investment management firm. Tudor Ventures provides growth capital to later-stage technology and services companies. For more information, please visit www.tudorventures.com.

EPIC Ventures

Founded by Zions Bank in Salt Lake City in 1994, EPIC Ventures is a premier venture firm focused on early stage technology investments in internet infrastructure, software, cloud and mobile services. With over $250m under management, EPIC helps to create companies, not just fund them. EPIC’s Fund IV is actively investing in creating the country’s future information economy. For more information, please visit www.epicvc.com.

Peabody, MA –

StudentCity is an online destination specialist tour operator providing branded packages to the US student travel market. It fits perfectly with First Choice’s strategy of increased focus on specialist businesses operating in niche areas, presents substantial organic growth opportunities and has the ability to build a commanding position in a fragmented market.

Boston Meridian acted as sole financial advisor to StudentCity.com in the transaction.

Pittsburgh, PA –

The strategic merger will create the leading vendor in the rapidly growing market for SRM applications in customer service and support. Under the terms of the agreement, Kent Heyman, CEO of ServiceWare, will become chairman of the board. Bruce Armstrong, CEO of Kanisa, will become CEO of the combined company, which will be headquartered in Cupertino, CA. The new name of the conbined company has not yet been determined.

Boston Meridian acted as a financial advisor to ServiceWare in the transaction.