Acquisition will integrate Permeo's on-demand endpoint access, security and information protection technology with the Blue Coat ProxySG family of proxy appliances.

Blue Coat Systems, a provider of proxy appliances, today announced that it has signed a definitive agreement to acquire Permeo Technologies, Inc., a privately-held provider of on-demand endpoint access, security and information protection solutions, for approximately $60.8 million, including approximately $13.4 million in cash and approximately $47.4 million in Blue Coat common stock, based on the closing price of Blue Coat common stock of $45.72 on December 30, 2005.

The acquisition will result in the integration of Permeo's on-demand endpoint access, security and information protection technology with the Blue Coat ProxySG family of proxy appliances. Blue Coat intends to leverage the Permeo technology to extend its proxy infrastructure to provide advanced levels of protection and control to any endpoint connecting to enterprise applications.

The consideration, which is for all of Permeo's securities other than unvested stock options, is subject to adjustment based on the average closing price of Blue Coat common stock over a 10 trading day period prior to the closing date of the transaction, as well as certain adjustments as provided in the merger agreement. Transaction costs and the value of unvested stock options, which are being assumed by Blue Coat in the acquisition, are not included in the $60.8 million above. The closing of the acquisition is subject to customary conditions, and is expected to occur in approximately 60 days.

"The enterprise workforce is increasingly more mobile and outside of the traditional corporate network but still requires the same level of protection and control," said Brian NeSmith, President and CEO, Blue Coat Systems. "The technology from Permeo helps us extend our proxy infrastructure for application and security services all the way to the endpoint of the virtual enterprise."

"Permeo has provided secure access and information protection solutions for both managed and unmanaged endpoints to many of the world's largest enterprises," said Michael S. Bennett, CEO, Permeo Technologies. "Combining our on-demand delivery technology for application and security services with Blue Coat's market-leading proxy infrastructure solutions will give customers a whole new level of end-to-end secure content and application delivery."