Tuesday, October 4, 2011

McAfee buying Portsmouth's NitroSecurity

By Rodney H. Brown

NitroSecurity Inc., of Portsmouth, N.H., has agreed to be acquired by McAfee Inc. for an undisclosed amount, according to the companies.

Santa Clara, Calif.-based McAfee said in a release that the deal is expected to close by the fourth quarter of 2011. Once the sale has closed, the NitroSecurity team will likely be incorporated into the McAfee Risk and Compliance business unit, officials said.

McAfee will be incorporating NitroSecurity’s security information and event management (SIEM) solutions and analytical tools into its own security offerings. McAfee said it was attracted to NitroSecurity’s “leadership position in the SIEM market.”

Ken Levine, chairman and CEO of NitroSecurity said in the release the company was a “long standing McAfee Security Innovation Alliance partner.”

Levine declined to state how much McAfee paid for NitroSecurity. He did say that he and basically all of the company’s approximately 115 employees would become McAfee employees, and that he had an open-ended offer from McAfee to stay in charge of NitroSecurity.

“I’m there as head of Nitro for as long as it makes sense for both parties,” he said. “My agreement with McAfee is, they’re OK with me staying on as long as I want, and I said I don’t want to overstay my welcome, but I would say (I’ll stay) at least a year-plus.”

NitroSecurity will still execute on its growth plans, Levine said, which would have the company adding about 30 people in 2012, mostly in the first half of the year.

Almost one year ago, NitroSecurity landed $6 million in a Series B funding round that was co-led by existing investors Brookline Venture Partners – Levine’s investment firm – with First Analysis and NewSpring Ventures. Levine made a point of saying that the other two firms were from Chicago and Philadelphia, and that no other New England VC firm would get a return on the sale, as they all turned him down when he recapitalized the firm in 2009.

In 2008, the company took in $10 million in Series D funding, which brought NitroSecurity’s total venture investment at the time to $35 million. Prior to the 2008 funding round, NitroSecurity withdrew a $55 million initial public offering of stock, filed late in 2007.