IBM TO ACQUIRE INTERNET SECURITY SYSTEMS

[Larry Seltzer <Larry () larryseltzer com>]

IBM TO ACQUIRE INTERNET SECURITY SYSTEMS 

 

Acquisition Bolsters IBM's Position as a Leader in Security Solutions

 

ARMONK, NY and ATLANTA, GA - August 23, 2006: IBM (NYSE: IBM) and
Internet Security Systems, Inc. (NASDAQ: ISSX) today announced the two
companies have entered into a definitive agreement for IBM to acquire
Internet Security Systems, Inc., a publicly held company based in
Atlanta, Ga., in an all-cash transaction at a price of approximately
$1.3 billion, or $28 per share. The acquisition is subject to Internet
Security Systems, Inc. shareholder and regulatory approvals and other
customary closing conditions. The transaction is expected to close in
the fourth quarter of 2006. 

 

Internet Security Systems (ISS) provides security solutions to thousands
of the world's leading companies and governments, helping to proactively
protect against internet threats across networks, desktops and servers.
ISS software, appliances and services monitor and manage network
vulnerabilities and exploits and rapidly respond in advance of potential
threats. This acquisition advances IBM's strategy to utilize IT
services, software and consulting expertise to automate labor-based
processes into standardized, software-based services that help clients
optimize and transform their businesses. 

 

This acquisition also reinforces IBM's position in the rapidly growing
area of Managed Security Services. With concerns ranging from data theft
to implementing and managing increasingly complex regulatory
requirements, addressing IT security has become one of the most complex
challenges companies are facing, regardless of size, location or
industry. 

 

ISS augments IBM's ability to address this growing industry challenge by
combining ISS' complementary automated security platform, services,
software and expert consultants with IBM's broad security portfolio,
innovative research and global reach. Together, IBM and ISS will help
clients of all sizes preemptively stay a step ahead of targeted security
threats or attacks. 

 

The acquisition is an important addition to IBM's security and privacy
services business. ISS' product line and extensive expertise complements
IBM's long-standing security research efforts, consulting and managed
service delivery capabilities, which currently provide security
solutions to the heterogeneous environments of thousands of IBM's
clients. ISS will join IBM as a business unit within IBM Global
Services' Security organization.

 

"Companies recognize that rapidly evolving security threats and complex
regulatory requirements have turned security into a mission-critical
priority," said Val Rahmani, General Manager, Infrastructure Management
Services, IBM Global Services.  "ISS is a strategic and valuable
addition to IBM's portfolio of technology and services. This acquisition
will help IBM to provide companies with access to trained experts and
leading-edge processes and technology to evaluate and protect against
threats and enforce security policies."

 

"Clients increasingly recognize that security must become a
network-integrated business process rather than a reactive response to
individual threats," said Tom Noonan, President and CEO of ISS. "By
delivering an integrated security platform that is adaptable and
extensible to address new threats and business requirements without
incremental complexity and cost, ISS has delivered the foundation for
delivering security as a service. These on-demand capabilities, together
with our managed security services, appliances and software will further
bolster IBM's leading security services and products as we take this
innovation out to a larger, global stage."

 

IBM will utilize ISS' X-Force security intelligence service, which
proactively protects networks with detailed analyses of global online
vulnerabilities and threat conditions.  The ISS global network of
security operations centers (SOCs), which include sites in Tokyo,
Brussels, Brisbane, Detroit and Atlanta, will also be added to IBM's
existing global network of SOCs.  IBM security consultants and global
sales force will also offer ISS' line of security appliances and
software, and fully enable it for IBM and third party products, services
and solutions.

 

ISS has more than 11,000 customers worldwide including 17 of the world's
largest banks, 15 of the largest governments, 11 of the top public
insurance companies and 13 of the world's top IT organizations. ISS also
brings to IBM a network of business partners skilled in selling the ISS
product line and an expanded product set to the IBM Business Partner
channel.

 

IBM currently has over 3,500 professionals delivering consulting,
implementation and out-tasking security services to thousands of
organizations all over the world. 

 

Following completion of the acquisition, IBM intends to:

 

*         Establish ISS' operations as a business unit within IBM's
Infrastructure Management Services unit, part of IBM Global Technology
Services

*         Integrate ISS' software technology with Tivoli's IT service
management portfolio, which includes software for Identity Management,
Access Management, Service Oriented Architecture (SOA) security and
Security Information Management 

*         Market and sell ISS' Managed Security Services and portfolio
of Network, Application, Server and Endpoint Protection products through
IBM's and ISS' worldwide sales channels and Business Partners

*         Further expand the scope and capabilities of IBM's business
and IT asset management consulting practices, and deliver services for
ISS-based solutions through IBM Global Services

*         Build upon the companies' existing business relationship,
which began in 1999

 

About IBM

For more information about IBM, go to www.ibm.com

 

About ISS, Inc.

ISS, Inc. is the security advisor to thousands of the world's leading
businesses and governments, providing preemptive protection for
networks, desktops and servers. An established leader in security since
1994, the ISS integrated security platform is designed to automatically
protect against both known and unknown threats, and helps to keep
networks up and running and shields customers from online attacks before
they impact business assets. ISS products and services are based on the
proactive security intelligence of its X-Force research and development
team - a world authority in vulnerability and threat research. The ISS
product line is complemented by comprehensive Managed Security Services
and Professional Security Services. For more information, visit the ISS
Web site at www.iss.net or call Heidi Litner at 404-236-3763.

ISS is a trademark and Proventia and X-Force are registered trademarks
of ISS, Inc. All other companies and products mentioned are trademarks
and property of their respective owners.

 

 

 

# # # 

 

ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT 

This communication may be deemed to be solicitation material in respect
of the proposed merger (the "Merger") of ISS Inc. (the "Company") with
and into a wholly-owned subsidiary of International Business Machines
Corp. ("IBM"). In connection with the Merger and required stockholder
approval, the Company will file with the SEC a proxy statement and other
relevant materials that will contain important information about the
Merger. Investors and security holders of the Company are urged to read
the proxy statement and any other relevant materials filed by the
Company because they contain, or will contain, important information
about the Company and the Merger. All documents filed by the Company
with the SEC, when available, may be obtained for free at the SEC's
website at www.sec.gov. In addition, the documents filed with the SEC by
the Company may be obtained free of charge by directing such request to:
Ed Eiland, ISS Investor Relations, 404-236-4053 or from the Company's
website at www.iss.net. 

The Company and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from the Company's
stockholders in favor of the Merger. Information about the executive
officers and directors of the Company and their ownership of the
Company's common stock is set forth in the proxy statement for the
Company's 2006 Annual Meeting of Stockholders, which was filed with the
SEC on April 18, 2006,. Investors and security holders may obtain more
detailed information regarding the direct and indirect interests of the
Company and its executive officers and directors in the Merger by
reading the proxy statement regarding the Merger when it becomes
available. 

Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: This release contains forward-looking statements based on
current expectations or beliefs, as well as a number of assumptions
about future events, and these statements are subject to important
factors and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements. The
forward-looking statements in this release address a variety of subjects
including, for example, the functionality, characteristics, quality and
performance capabilities of ISS's products and technology; results
achievable and benefits attainable through deployment of ISS's products
and provision of services; the ability of ISS's products to help
companies manage how they provide pre-emptive protection for networks,
desktops and servers; and the expected timing of the closing of the
proposed merger. The following additional factors, among others, could
cause actual results to differ materially from those described in these
forward-looking statements: the timing and results of required
regulatory review and approval by ISS's stockholders of the proposed
merger; and those factors discussed in the Section entitled "Risk
Factors" in Part II Item 1A of ISS's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2006. ISS disclaims any intent or obligation
to update any forward-looking statements made herein to reflect any
change in ISS's expectations with regard thereto or any change in
events, conditions, or circumstances on which such statements are based.

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