This is a purely vertical acquisition by MFE in that it will add a portfolio of "Enterprise Gateway" security hardware and software products to its highly popular line of personal computer security software. Given that the all niches within network security segment, for both hardware and software, are hyper-competitive, this combination is a non-issue with respect to antitrust matters.

The brutally competitive nature of SCUR's security products is highlighted quite clearly in the following list of competitors from its annual report. Note that Cisco remains, and will continue to remain, the dominant hardware security player well into the foreseeable future:

Check Point Software Technologies Ltd.; Cisco Systems, Inc.; Fortinet, Inc.; Juniper Networks, Inc.; EMC Corporation; VASCO Data Security International, Inc.; SonicWall, Inc.; Blue Coat Systems, Inc.; Symantec Corporation; IBM Internet Security Systems; Tumbleweed Communications Corp.; and Websense, Inc.

The SEC review may be somewhat more complicated as SCUR has encountered some recent difficulties in its required periodic filings. The company's 2005 10-Q (2rd quarter) required three separate amendments before clearing, while its Q4 2006 was also pulled for review and revision a single time. IN 2005, the company's annual report for 2004 required amendments nine months after the initial filing, which was related to the quarterly report issues in the same year. SCUR has also had a series of registration statements reviewed beginning in 2004 and continuing into 2007.

The above does not necessarily mean this transaction will encounter a terribly long (+90 days) merger proxy review, but it does suggest that some delays from the SEC are possible. The all-cash nature of this transaction should alleviate this somewhat, as well as the SEC's recent habits of expediting the large majority of proxy reviews over the last few years.

In a worst-case scenario, the proxy review will last roughly two months, pushing the SCUR shareholder meeting and close into mid-January 2009. However, the current projection is an SEC review in the 45-day range, which would allow the close to occur in mid/late-December -- assuming the first proxy is filed by mid-October, at the latest.

Additional research into this transaction has discovered a very minor overlap in a hardware segment identified with the security industry as "Unified Threat Management Security Appliances". These are network-area security products which both SCUR and MFE offer to varied business clients.

The market share data below (c. 2004) shows quite clearly that MFE is a negligible player in this field, and that both companies compete directly with market leaders Fortinet and Symantec:

	Revenue ($M)	Revenue Share (%)
Fortinet	60.4	18.1
Symantec	59.4	17.8
Secure Computing	47.4	14.2
Juniper	32.1	9.6
Crossbeam	23.7	7.1
ServGate	18.9	5.7
SonicWALL	17.0	5.1
Secui.com	16.2	4.8
Check Point	9.5	2.9
ISS	5.2	1.6
SecureSoft	3.3	1.0
McAfee Security	2.5	0.7
Other	38.0	11.4
Total	333.6	100.0

Again, this transaction looks perfectly clean from a regulatory perspective, with the SEC almost certainly being the key timing factor. It will not be in the least surprising is MFE is able to complete this deal in 90 days or less, even with SCUR's somewhat concerning recent history with the SEC.