Citadel, McAfee Sign

Citadel Security Software has signed a definitive agreement with McAfee for the acquisition of substantially all of Citadel's assets

Dark Reading Staff, Dark Reading

October 3, 2006

2 Min Read

DALLAS -- Citadel Security Software Inc. (OTCBB: CDSS) announced today that it has signed a definitive agreement with McAfee, Inc. (NYSE: MFE) for the acquisition of substantially all of Citadel's assets for approximately $56 million in cash plus an estimated $4 million in working capital reimbursement. Citadel provides leading solutions in security policy compliance and vulnerability remediation to help government and commercial enterprises neutralize security vulnerabilities and reduce risk. McAfee(R) is a global leader in intrusion prevention and security risk management. The proposed transaction is expected to close in the fourth quarter of 2006, subject to closing conditions including Citadel stockholder approval, expiration of the Hart-Scott-Rodino (HSR) waiting period and other conditions in the definitive agreement.

After payment of estimated transaction costs, liabilities, preferred stock and other cash payments, Citadel expects to distribute to its common stockholders an aggregate amount in the range of approximately $0.52 to $0.54 per share of common stock in the form of liquidating dividends. Citadel anticipates that this distribution will be made in one or more cash dividends with a substantial portion of the payment to be made as soon as practicable following expiration of the 30-day indemnification period under the definitive agreement. The balance will be paid at a later date after payment of any remaining obligations. Citadel will provide an update in its proxy statement with respect to the timing and amounts of estimated distributions.

Citadel has not set a record or payment date for such distributions, and the final amount and timing of the distributions is dependent upon a variety of factors, including the timing and amount of costs and expenses, tax payments and the amounts of liabilities and potential indemnification claims under the definitive agreement.

"We believe that Citadel offers the leading vulnerability remediation and compliance solution available in the marketplace today and is protecting some of the largest government and corporate networks with over 4.5 million licensed devices. Following the consummation of the proposed transaction, we believe that our customers and partners will continue to receive the highest level of services and support for their security policy compliance and risk management and vulnerability remediation technology needs. We also believe that this transaction is in the best interest of our shareholders, employees, and customers," stated Steven B. Solomon, chairman and chief executive officer of Citadel.

Citadel Security Software Inc. (Nasdaq: CDSS)

McAfee Inc. (NYSE: MFE)

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Dark Reading Staff

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