SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
--------------------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 6, 1997
--------------------
AXENT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-28100 87-0393420
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File No.) Identification No.)
2400 Research Boulevard
Suite 200
Rockville, Maryland 20850
(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (301) 258-5043
<PAGE>
Item 5. Other Events.
On January 6, 1997, AXENT Technologies, Inc. ("AXENT"), AssureNet
Pathways, Inc. ("AssureNet", formerly known as Digital Pathways, Inc.) and
Axquisition, Inc., a wholly-owned subsidiary of AXENT, entered into an
Agreement and Plan of Merger (the "Merger Agreement"), the description of which
herein is qualified in its entirety by the terms of the Merger Agreement. The
Merger Agreement provides that, following approval and adoption of the Merger
Agreement by the stockholders of AssureNet, AssureNet will be merged with and
into Axquisition, Inc., which will be the surviving corporation and remain a
wholly-owned subsidiary of AXENT. The Merger Agreement provides that, upon
consummation of that merger, AXENT would issue 1,550,000 shares (or such smaller
number as equals $29,450,000 divided by the Buyer Share Market Value, as that
term is defined in the Merger Agreement) of its common stock in exchange for (a)
all shares of AssureNet capital stock outstanding at the effective time of the
merger, (b) all shares of AssureNet common stock issuable upon exercise of
options issued by AssureNet that are "in-the-money" (i.e., that have an exercise
price per share less than the Common Stock Conversion Ratio multiplied by the
Buyer Share Market Value, as those terms are defined in the Merger Agreement)
and (c) all shares of AssureNet common stock issuable upon exercise of options
and warrants issued or granted by AssureNet on or after January 6, 1997. Upon
consummation of that merger, AXENT will assume all options and warrants granted
or issued by AssureNet. The Merger Agreement is subject to approval by AssureNet
stockholders, government regulatory approval and certain other standard closing
conditions. Holders of a majority of AssureNet common shares, preferred shares
and Series C preferred shares have agreed to vote for the merger. Closing
currently is expected to occur in late March 1997.
AXENT expects that the proposed merger with AssureNet will be accounted
for using purchase accounting. In connection with that transaction, AXENT
expects to take a one-time charge of $24 million to $32 million for purchased
in-process research and development. Based upon the closing price of AXENT's
common stock on January 6, 1997, the last full trading day prior to the public
announcement of the proposed merger, the 1,550,000 shares that AXENT would issue
therein would have an aggregate value of $24.8 million. The 1,550,000 shares
that AXENT would issue in the proposed merger would constitute approximately
13.3% of the shares of AXENT's common stock outstanding at December 31, 1996.
Concurrent with the execution of the Merger Agreement, AssureNet and
AXENT entered into a Management Agreement, the form of which is attached as
Exhibit G to the Merger Agreement and the description of which herein is
qualified in its entirety by the terms of the Management Agreement. The parties
entered into the Management Agreement with the expectation that the proposed
merger would be consummated and that, in the meanwhile, the parties would
benefit if AXENT could make and implement good faith decisions to integrate the
operations and products of AssureNet with those of AXENT. AXENT has authority
under the Management Agreement to manage all the business and operations of
AssureNet from January 6, 1997 to the effective time of the Merger, unless the
Management Agreement is otherwise terminated. AXENT will use its best efforts to
consult with and inform the Chief Financial Officer (or other appropriate
officer) of AssureNet of actions proposed to be taken under the Management
Agreement, and will obtain the approval of AssureNet's directors if required
under AssureNet's charter documents or California law. AXENT will use its
reasonable business judgment and will treat AssureNet's assets as it treats its
own assets in the course of running AXENT's own business. AXENT will receive no
fees for its services under the Management Agreement, but will be reimbursed by
AssureNet for equipment, reasonable travel costs and related expenses incurred
under the Management Agreement. The Management Agreement terminates
automatically if the Merger Agreement terminates and may be terminated by AXENT
at any time.
The Merger Agreement and exhibits thereto are expected to be filed as
part of a Registration Statement on Form S-4 on or about January 22, 1997.
Item 7. Financial Statements and Exhibits.
Exhibit
Number Description
- ------ -----------
99.1 Press Release of AXENT dated January 7, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AXENT TECHNOLOGIES, INC.
Date: January 22, 1997 By: /s/ John C. Becker
--------------------
John C. Becker, President and
Chief Operating Officer
<PAGE>
Exhibit Index
Sequentially
Exhibit No. Description Numbered Page
99.1 Press Release of AXENT dated 6
January 7, 1997
Exhibit 99.1
CONTACT
Jennifer Whipp Mike Farber, Owen Davis
AXENT Technologies, Inc. Schwartz Communications
Tel: (301) 670-3653 Tel: (617) 431-0770
Fax: (301) 670-3586 [email protected]
[email protected] [email protected]
FOR IMMEDIATE RELEASE
AXENT Technologies, Inc. to Acquire AssureNet Pathways, Inc.
Adds Remote Access, Network and Internet Authentication to the
OmniGuard Product Line
Rockville, MD; January 7, 1997 - AXENT Technologies, Inc. (NASDAQ: AXNT), today
announced that it has signed a definitive agreement to acquire AssureNet
Pathways, Inc. (formerly known as Digital Pathways, Inc.), a privately held
supplier of token-based authentication products. The agreement, approved by the
respective Boards of Directors, is subject to approval by AssureNet
shareholders, government regulatory approval and certain other usual closing
conditions. Closing currently is expected to occur in late March 1997.
Terms of the agreement call for AXENTTM to issue up to 1,550,000 shares of
common stock, currently valued at $24.8 million, to AssureNet shareholders. A
majority of AssureNet shareholders have agreed to vote for the acquisition which
will be accounted for using purchase accounting. In connection with the
transaction, AXENT expects to take a one-time charge for purchased in-process
research and development. AXENT currently expects that the charge will
constitute a substantial portion of the final purchase price.
The acquisition further enhances AXENT's leadership position in enterprise
information security by adding complementary remote access authentication
products, Internet/Intranet authentication products and significantly expanding
AXENT's indirect distribution capabilities with the addition of approximately
fifty new resellers.
"Customers are demanding that security vendors provide multiple, integrated
solutions that address a broad range of requirements across multiple computing
platforms," said Rich Lefebvre, AXENT's Chairman and CEO. "AssureNet's
Defender(R) products are highly synergistic with AXENT's OmniGuardTM product
line. The combination of OmniGuard and Defender will provide a next generation
centralized authentication and single sign-on solution."
"Point security offerings like firewalls and access control products alone are
not enough to protect sensitive information stored throughout corporate IT
environments," said Gary Lynch, Research Director, Information Security
Strategies, Gartner Group. "It is critical for enterprises to be able to
authenticate their growing number of remote users with more than just a static
password."
AssureNet's Defender product line includes software- and hardware-based tokens
that are easy to use, difficult to circumvent, and centrally managed at an
enterprise level. Defender will add remote access and, in the future,
Internet/intranet authentication to AXENT's OmniGuard product line. Defender
will also add token-based challenge/response authentication to OmniGuard's
existing authentication capability. At the same time, OmniGuard will be able to
centrally administer Defender hardware and software tokens and Defender Security
Servers, in addition to native PC, NetWare, UNIX, Windows NT, and MVS platforms.
The combination of OmniGuard and Defender will allow AXENT to offer a common
form of authentication whether the user accesses the network via a dial-up link,
Internet, intranet, or through the LAN. OmniGuard's resource management
solutions can securely authenticate the user and broker access to all network
resources (LAN, Web, or Internet/intranet). The combination of Defender and
OmniGuard will position AXENT to provide a universal authentication solution as
well as more easily and securely solve the single sign-on problem.
"As a result of this acquisition, AssureNet customers will be able to take
advantage of AXENT's greater development and marketing resources," said Ainslie
Mayberry, acting president and CEO of AssureNet Pathways. "By joining forces
with AXENT, we will be able to accelerate delivery of customer-requested
enhancements, provide better support and services, and offer our customers the
benefit of integration with AXENT's extensive line of information security
solutions."
AXENT will conduct an investor conference call to discuss this acquisition on
January 7, 1997 at 9:30 am EST. Interested parties can participate by dialing
1-800-611-1148.
Except for the historical information contained herein, the matters discussed
and the statements made in this release concerning AXENT's future prospects are
"forward-looking statements" under the Federal securities laws that involve
risks and uncertainties. There can be no assurance that future results will be
achieved, and actual results could differ materially from forecasts and
estimates. Important factors that could cause actual results to differ
materially include, but are not limited to, AXENT's ability to assimilate the
acquired operations and products, timely development and market acceptance of
the acquired and new products, diversion of management's attention due to the
acquisition, loss of key employees, distributors or resellers of AssureNet, the
impact of competitive products, limitation of the write-off anticipated in
connection with the acquisition, timely completion of the acquisition on its
current terms, and worldwide economic conditions as they affect the spending
intentions of the customers of AXENT or AssureNet, as well as the other risks
detailed in the AXENT registration statement in Form S-1 filed February 14,
1996, as amended, and in AXENT's quarterly reports as filed on Forms 10-Q.
About AXENT
AXENT Technologies, Inc., is the leading provider of enterprise-wide information
security solutions for distributed computing environments. The OmniGuard suite
of products enables organizations to centrally manage information security. In
addition, OmniGuard provides enhanced data confidentiality, access control, user
administration and intrusion detection across the Internet and intranets, for
UNIX, Windows 3.x, Windows NT, Windows 95, NetWare and mid-range systems.
Headquartered in Rockville, MD, AXENT's broad line of security offerings is used
by Fortune 1000 and governments worldwide to effectively secure and protect
information systems in heterogeneous computing environments. Contact AXENT via
Email at [email protected], or visit AXENT's World Wide Web site at
http://www.axent.com.
About AssureNet
AssureNet Pathways, Inc. provides a broad range of network security solutions
that protect enterprise-wide networks from unauthorized entry, tampering and
theft of information and services. Backed by more than a decade of expertise in
the network security, AssureNet Pathways products are the only standards-based
security solutions available that are easy to use and manage, in addition to
being cost-effective. AssureNet Pathways customers include leading companies in
electronics, finance, health services and communications industries. AssureNet
Pathways is headquartered in Mountain View, Calif., with regional offices
throughout the U.S., and in Basingstoke, U.K. The company's products are sold
worldwide through a network of distributors, value-added resellers and systems
integrators.
With more than 700,000 users at more than 2,500 corporations world-wide,
AssureNet is one of the leaders in the rapidly growing market for products that
can positively authenticate remote users who access internal corporate networks.
As an increasing number of users work from home, access the corporate network
while on the road, or use the Internet to access internal systems, the market
for authentication products is expected to increase significantly. According to
analysts' estimates, expenditures for authentication products are expected to
grow from $225 million in 1996 to $2.6 billion by the year 2000.
###
All trademarks, service marks, and company names are the property of
their respective owners.
