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 Two Web security startups -- U.K.-based Marshal Ltd. and Southern California's 8e6 Technologies -- have merged to create what is claimed to be the only independent software company that can secure all forms of Internet communications streams.The company said its secure Web gateway software, which provides security for internal corporate emails, Web-based email services, IMs and websites, serves more than 20,000 customers withy more than 16 million end users in 96 countries, and had combined billings of more than $50 million in the past twelve months. Apparently both companies had enough brand recognition to warrant naming the new company Marhsal8e6, a rather unwieldy moniker that ranks up there with other tech mouthfuls like the now-defunct GlobespanVirata or Kulicke & Soffa Industries Inc. [KLIC] Updata Advisors partner Don More, who represented Marshal in the deal, tells us that scale is critical in the security business, and was a driver behind the merger of equals. "If you have a choice between a traditional exit with a public buyer or growing the business, this is an attractive alternative," More says. "A public buyer will typically say, 'I'm discounted in the market, so I'll discount any companies I might acquire too'." Private-to-private deals will increase because of this and the general lack of exits, he adds. Marshal8e6 runs up against some stiff competition in the form of security software maker McAfee Inc. [MFE], which in September agreed to pay $465 million to buy gateway security provider Secure Computing Corp. Other rivals include Websense Inc. [WBSN] and Blue Coat Systems Inc. [BCSI] Updata Advisors' venture capital affiliate Updata Partners led a $10 million funding that closed as part of the merger. Updata Advisors helped raise the capital. James Socas, a general patner with the venture firm, will join Marshal8ee6's board. Other investors in the company include Kelso Place Asset Management, Darwin Group, CX Ventures and Vora Ventures. Financial details of the merger were not disclosed. -- Olaf de Senerpont Domis See Nov. 12 press release from Marshal8e6 See FAQ on Marshal - 8e6 merger See Nov. 3 story on Updata Advisors from Tech Confidential
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