MURRAY — Speed and security are two facets of the Internet that business and leisure users can't get enough of.
So when privately held Phobos Corp. of Murray launched a product line that makes Internet servers run faster by increasing efficiency and that handles encryption needs for secure online transactions, the company got noticed.
The self-proclaimed "Internet wait-loss" company, with less than $3 million in sales last year, announced Tuesday it is being picked up in an acquisition valued at $268 million.
"It's one of those once-in-a-lifetime things," Phobos president and chief executive officer Ron Heinz said of the deal, which is expected to be completed by the end of the year.
The buyer is Sonic WALL of Sunnyvale, Calif., a company whose earnings show it knows how to pick the right tools to make money. SonicWALL on Tuesday also reported record revenues and profits for its third quarter with net income for the quarter of $6.1 million, a 708 percent increase over the same quarter the previous year.
In announcing the Phobos acquisition, SonicWALL said it anticipates the addition of Phobos' unique encryption technology will create a powerful and comprehensive range of Internet security tools that can increase Web-site performance.
Online purchases and other secure Web-based transactions, like encrypted government e-mail, multiply the load on Internet hardware "up to 50 times normal correspondence," Heinz said. "As electronic commerce really starts to explode, the needs for security tend to be a pretty nice premium for companies that have new products they can bring to the market in that type of space. We have the best product in the world for what we do right now, and it just started shipping in August."
Phobos got a taste for its success soon after the August launch of its encryption "offloader" and began weighing its options, including going public. "But when this came along (with SonicWALL), it was too attractive to us to turn down."
Phobos has a work force of about 70 in Utah. Joining with SonicWALL will create about 50 additional positions short-term. "We believe we'll probably be in a position to hire more engineering talent right away in Utah," he said.
SonicWALL bills itself as the leading provider of Internet security solutions for broadband customers in the small- to medium-size enterprise, branch office, telecommuter and education markets. Its offering of Internet security appliances includes firewall protection and an expanding array of other services that include anti-virus and strong authentication using digital certificates and content filtering.
SonicWALL shares have been generally down, along with the bulk of technology stocks, in the weeks since its Sept. 15 stock split. Shares were down almost 20 percent shortly before noon Wednesday with analysts listing the stock as a moderate to strong buy.
E-mail: steve@desnews.com