Local computer security firm Arxceo is sold
Publicly traded company in Japan to pay $15M cash
Thursday, February 16, 2006
Huntsville-based Arxceo, which develops security devices for computer networks, has been purchased by a Japanese firm.
Japan Communications Inc., a Japan-based publicly traded company, will pay about $15 million in cash for Arxceo, said Chandler Hall, Arxceo's co-founder and vice president of marketing. The purchase will be phased in during the next two years, as JCI buys out investors, he said. Arxceo will operate as an independent subsidiary of JCI.
Arxceo makes computer "security appliances" that Hall said are "anti-reconnaissance and anomaly-based," meaning they search for unusual Web traffic from hackers, viruses or worms and block it, providing a first line of defense in front of a computer network's firewall.
"We're like a bulkhead on a submarine," he said. "Just like in a real war, hackers start by (observing) your network," Hall said. "We have the best defense against that."
Arxceo was founded in 2003 by Hall, Charles Lofty, David Izatt, Robert Asprey and Donald Davidson. The company began developing software code to protect networks from hackers.
Last February, the company raised $1.2 million from investors, which it used to release its first product, the Ally IP 1000, a box about the size of a stereo component. Its newest product, the Ally 100, is about the size of a sleeve of golf balls and protects smaller networks from hackers who would seek to steal critical data.
The company has 12 employees and probably will add staff in product development, quality assurance and sales, Hall said.
Tokyo-based JCI is a mobile virtual network operator, providing wireless computer and high-broadband mobile telephone service to businesses throughout Japan. Founded in 1996, the company went public last year, trading on the Osaka Securities Exchange. It has a U.S. subsidiary, Computer and Communication Technologies Inc. in Englewood, Colo.
The Arxceo acquisition "augments our ability to secure the corporate mobile work force," said Dr. Frank Seiji Sanda, founder and chief executive of JCI. Sanda said JCI plans to expand its portable broadband service in the U.S.
Arxceo's technology will be integrated into JCI's products, company officials said.
"Because the amount of code that it takes to do the (network security) job is relatively small compared with other ways to provide security, we think eventually we might have the right technology to be in cell phones," Hall said.
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