Defence giant Raytheon has agreed a deal with Vista Equity Partners to form a new company combining Websense with Raytheon Cyber Products. The new joint venture (Raysense? Webtheon?) will combine Raytheon Cyber Products with Websense's TRITON line of web filtering and other enterprise security products.
Raytheon – known for the Patriot missile, among other arms – will invest $1.57bn in net cash for majority ownership of the new company. Vista will also invest into the new joint venture firm.
More specifically, Raytheon will contribute $1.9bn (net of cash acquired) to acquire Websense. About a third of this ($600m) will take the form of an inter-company loan to the joint venture.
Raytheon will also contribute the assets of Raytheon Cyber Products and related intellectual property, which is valued at $400m.
Raysense – or whatever the new firm is called – aims to provide "defence-grade cybersecurity to combat the evolving cyber threat environment" characterised by "sophisticated threats posed by well-funded, nation-state adversaries and criminal networks".
The cloud, mobility and other trends are making organisations even more vulnerable, according to the security firms.
"Commercial companies are evolving their infrastructure with cloud computing, mobility and the internet of things to stay competitive and, as a result, they have become more vulnerable than ever," said David C. Wajsgras, president of Raytheon Intelligence, Information and Services business.
The rationale for the deal is part technology and part channel. Websense specialises in selling into commercial enterprises while Raytheon has the ear of governments and the military.
The new company – which plans to separately report the Raytheon business segment – will be led by John R. McCormack, chief exec of Websense.
The deal (which was rumoured over the weekend) is expected to close in the second quarter of 2015, subject to regulatory approvals and other closing conditions. ®