Surfcontrol Plc has confirmed that takeover starts are ongoing, after the supplier of filtering software and content security systems and services received an unsolicited approach last December. The Scotts Valley, California-based company refused to go into further detail about the takeover discussions.
However, Symantec Corp is considered to be the most likely suitor, considering its acquisitive track record and its positioning in the two markets in which SurfControl specializes.
In July 2006 Surfcontrol purchased BlackSpider Technologies Ltd for $37m and has since developed an increasingly important revenue stream from its ability to deliver services to protect businesses at the desktop, gateway, and online.
This move away from the more traditional software-licensing model to the delivery of online security services continues to pay off. During the third quarter on-demand security services grew at 40% while traditional product billing grew at 7%. Surfcontrol also said that on-demand services contributed a profit for the first time, three months ahead of management expectations.
Overall billings grew 24% during the quarter to $32.6m, compared to $26.4m in the year-ago quarter. Surfcontrol said it is increasingly selling via the channel, with 79% of all billing now done via a channel partner, compared to 67% in the same quarter a year ago.
SurfControl will announce its actual results at the start of May. Shares in the company rose 1.11% to 480 pence ($9.49) on the London Stock Exchange.