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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): August 31, 1999
ISS Group, Inc.
(Exact name of registrant as specified in its charter)
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DELAWARE 0-23655 58-2362189
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification Number)
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6600 PEACHTREE-DUNWOODY ROAD
EMBASSY ROW, BLDG. 300, STE. 500
ATLANTA, GEORGIA 30328
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (678) 443-6000
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
On August 31, 1999, ISS Group, Inc. issued a press release relating to
the entry into a definitive agreement to acquire Netrex, Inc. The acquisition
was consummated on August 31, 1999.
Item 7. Exhibits.
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Exhibit No.
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99.1 Press release dated August 31, 1999
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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.
Date: September 15, 1999
ISS Group, Inc
By:/S/ Richard Macchia
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Richard Macchia
Vice President and Chief Financial Officer
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EXHIBIT INDEX
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99.1 Press release dated August 31, 1999
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EXHIBIT 99.1
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CONTACTS: Michele Norwood Trade Press: Holly Hagerman
Internet Security Systems Connect Public Relations
678-443-6142 801-373-7888
[email protected] [email protected]
Business Press: Kristin Nofi
Brodeur Porter Novelli
617-587-2884
[email protected]
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FOR IMMEDIATE RELEASE
ISS ACQUIRES NETREX SECURE SOLUTIONS, REINFORCES POSITION AS LEADING
PROVIDER OF SECURITY MANAGEMENT SOLUTIONS
~ NEW ESERVICES OFFERINGS INCREASE ISS' ADDRESSABLE MARKET BY
MEETING THE NEED FOR OUTSOURCE SECURITY SOLUTIONS ~
ATLANTA, GA.-AUGUST 31, 1999 - ISS Group, Inc., parent company of
Internet Security Systems, Inc. (ISS) (NASDAQ: ISSX), today announced a
definitive agreement to acquire privately-held Netrex Secure Solutions of
Southfield, MI, a pioneer and leading provider of remote, security monitoring
services with revenues for the year ended December 31, 1998 of approximately
$21.8 million. Founded in 1992 with a current services customer base of more
than 500 customers, Netrex is the pioneer and largest independent provider of
security management services.
This acquisition represents a major development in the Internet
security industry, as ISS extends its market leadership position to provide
Managed Security Services critical to the protection of corporate e-commerce
programs and to the growth of e-businesses.
"This combination is about growth and opportunity. As our customers
transition from brick and mortar enterprises to e-businesses, they demand more
protection of their vital information assets and the systems that manage them,"
said Tom Noonan, President and Chief Executive Officer, ISS. "ISS now delivers
an end to end security management solution through our SAFEsuite(R) security
management platform coupled with around-the-clock security monitoring through
our managed services offerings." Noonan
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added, "ISS is excited to be the first enterprise security management
company to deliver an unmatched security solution that protects the
availability, integrity and confidentiality of our customer's e-businesses."
Under the terms of the agreement, approximately 2,450,000 unregistered
shares of ISS Group stock will be issued for all of the outstanding stock of
Netrex. There is a commitment to register up to 28% of the shares being issued
in this transaction in a filing with the Securities and Exchange Commission in
the near future. Additionally, options outstanding under the Netrex option plan
will be assumed under the ISS Stock Option Plan. The transaction is to be
accounted for using the pooling-of-interests method of accounting.
ISS AND NETREX COMBINE TO FORM NEW ISS ESERVICES ORGANIZATION
Netrex and its ePatrol(TM) family of managed security offerings will
form the critical foundation for a new ISS eServices business unit charterEd
with capturing the rapidly expanding Managed Security Services market, expected
to increase to $1.3 billion in 2002, according to analysts. By leveraging the
existing Netrex infrastructure and its market-leading technology for providing
highly scalable remote management of best-of-breed security technologies, ISS
and its established base of Internet Service Providers (ISP) and
Telecommunications partners will be able to provide an unmatched solution for
worry-free Security Management. ISS eServices will work closely with the
established ISS Enterprise Software organization, other best-of-breed security
providers and world-class service provider partners to continue to provide
security management software and services solutions that meet customers'
evolving needs.
ISS SIGNIFICANTLY EXPANDS ADDRESSABLE MARKET
By enabling the delivery of Security Management Solutions through a
managed services model, this acquisition dramatically increases the addressable
market for ISS. With ePatrol, virtually every organization with an Internet
connection and valuable electronic assets becomes a prospect for ISS' security
management solutions. This expanded market opportunity, on top of a healthy
annual growth rate for ISS' established SAFEsuite portfolio of security
management software products will act as a foundation for ISS' continued strong
growth.
Citigroup Vice President and Chief Information Security Officer,
Stephen Katz, commented, "The growth of the Managed Security Services market is
important. The
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potential for managed services should continue to grow as more and more
organizations are driven to focus on core business functions and look to
external service providers to manage their security risks through the
coordination of multiple security components and applications."
ISS ESERVICES ADDRESS GROWING REQUIREMENTS FOR OUTSOURCED SECURITY SOLUTIONS
Designed for businesses that need security but may not have the time,
internal resources or expertise to effectively protect networked systems and
data, Managed Security Services enable customers to put their security in the
hands of trusted experts who conduct 24x7 security monitoring and management of
their networks from a technically advanced Network Operations Center (NOC).
Managed Security Services also ensure customers critical piece of mind as
experts not only watch over their network but use leading-edge technology to
continually respond and manage the wide and increasing range of security
threats and vulnerabilities. The acquisition delivers on ISS' strategy to
provide customers with a critical security control system that can objectively
manage and control enterprise security policy across the entire IT
infrastructure, including systems, databases, networks, and critical business
and e-commerce applications.
Netrex's ePatrol is the industry's most complete suite of Managed
Security Services for around-the-clock protection of digital assets. Netrex's
Managed Security Services are backed by Security-1(TM), a comprehensive
methodology for enforcing security policy and managing security risks across
the IT infrastructure. ePatrol currently provides remote management of the
industry's best-of-breed security technology from Check Point, ISS, Trend Micro
and Security Dynamics including firewalls, VPNs, anti-virus and URL filtering
software, and intrusion detection systems.
Previously responsible for leading Bell South's Internet subsidiary,
Charles Meyers, most recently ISS Vice President of Corporate and Business
Development, will lead the new ISS eServices team as its Vice President and
General Manager. Mark Sims and Mike Sappington, President and Chief Operating
Officer respectively, will continue to play significant roles as leading the
product and field organizations within the new ISS eServices business unit.
"Mark Sims, Mike Sappington and their team at Netrex have built one of
the true market leaders in Managed Security Services," said Charles Meyers,
Vice President and
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General Manager, ISS eServices. "We are thrilled to have them join ISS and look
forward to working together as we focus on taking ePatrol and the underlying
Managed Security Services technology to the next level."
ABOUT ISS
ISS is the world's leading provider of security management solutions
for e-business. By offering best-of-breed SAFEsuite security software,
comprehensive ePatrol monitoring services and industry-leading expertise, ISS
serves as its customers' trusted security provider protecting digital assets
and ensuring the availability, confidentiality and integrity of computer
systems and information critical to e-business success. ISS' security
management solutions protect more than 5,000 customers including 21 of the 25
largest U.S. commercial banks, 9 of the 10 largest telecommunications companies
and over 35 government agencies. Founded in 1994, ISS is headquartered in
Atlanta, GA with additional offices throughout North America and international
operations in Asia, Australia, Europe and Latin America. For more information,
visit the ISS Web site at www.iss.net or call 800-776-2362.
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EDITORS NOTE: ISS will hold a conference call for press, analysts and
interested parties on August 31, 1999 at 8:00 a.m. PST/11:00 a.m. EST.
Domestic call-in number 888-847-6590
International call-in number: 630-395-0346.
Pass code: ISSX (or 4779)
A replay of the conference call will be available at 3:00 p.m.
PST/6:00 p.m. EST August 31, 1999 through September 7, 1999.
Domestic replay number: 800-327-0517
International replay number: 402-220-0184.
This release, other than historical information, includes forward-looking
statements made pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. The risks and uncertainties which
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, the following: the
level of demand for the Company's products; the volume and timing of orders;
product and price competition; the Company's ability to expand its domestic and
international sales and marketing organizations; the Company's ability to
develop new and enhanced products; the Company's ability to attract and retain
key personnel; the mix of distribution channels through which the Company's
products are sold; the growth in the acceptance and use of the Internet and of
private Internet-protocol networks or "intranets"; the extent to which
unauthorized access and use of online information is perceived as a threat to
network security; customer budgets; the assertion of infringement claims with
respect to the Company's intellectual property; seasonal trends in customer
purchasing; foreign currency exchange rates; general economic factors; and
risks concerning the rapid change of technology. These risks and others are
discussed in the Company's periodic filings with the Securities and Exchange
Commission. These filings can be obtained either by contacting ISS Investor
Relations or through the Securities and Exchange Commission's Web site at
"http://www.sec.gov".
Internet Security Systems and SAFEsuite are trademarks of Internet Security
Systems, Inc.
