ScanSafe gets $183M offer it can’t refuse

Last week, Cisco Systems agreed to acquire ScanSafe, a London-based provider of online security software-as-a-service solutions, and co-founder Roy Tuvey says that he had his pick of the litter.

Tuvey says that the company had several offers from large technology companies, but likely would not have acted on any of them had Cisco not come along. In fact, ScanSafe was looking to acquire others. The company had not yet spent any of the $10 million Series C round it raised late last year as a hedge against the downturn and as a “war chest” to buy companies.

“We picked Cisco purely because it was Cisco,” Tuvey says. “It was Cisco that made us do this.”

Cisco’s reach in distribution and its technology were too good to pass up, Tuvey says.

The transaction, for about $183 million in cash and retention-based incentives, is expected to close in Cisco’s second fiscal quarter, which ends in January.

Returns for ScanSafe’s investors look good and Tuvey says that the other suitors that wanted to acquire ScanSafe helped to put “a good value” on the company. Overall, ScanSafe—which develops technology to block malicious code that exploits flaws in Web applications—had raised about $32 million in venture funding from Scale Venture Partners (which invested in all four funding rounds), Montagu Newhall Associates and Balderton Capital (f.k.a. Benchmark Europe).

USA!! Scale Managing Director Rory O’Driscoll, who sits on ScanSafe’s board, said he felt “tinged with regret” over the acquisition because he liked working with ScanSafe. Tuvey credits O’Driscoll with keeping ScanSafe’s business on track.

ScanSafe’s employees will work with Ironport, an e-mail security provider that Cisco acquired nearly three years ago for about $830 million in cash and stock. Tuvey says that some ScanSafe employees will have expanded responsibilities at Cisco. —Deborah Gage