KEY POINTS:
Auckland network protection provider Esphion has been taken over by an Israeli company, Allot, which paid US$5.5 million ($7.2 million).
It was the first acquisition by the Israeli internet service optimisation provider Allot Communications, reported an Israeli business news website, globes-online.com.
"Allot will pay US$3.5 million plus up to an additional US$2 million if certain milestones are met during 2008," the website reported.
Esphion was formed in 2000 with a staff of 15, drawn from all parts of the globe, to provide software for large telecommunications companies and service providers.
The company was given $400,000 of taxpayer funds in 2004 to develop software to detect and stop computer "worms" within minutes of the start of an attack.
The money was provided by a Government agency, Technology New Zealand. It was also given $84,000 in public funding - most of it as a grant for private sector research - to create a new programming language and methodology to detect and deflect denial of service attacks on computer networks.
Allot said that the acquisition furthered its plan to offer value-added services on its new "service gateway" platform to help broadband providers to build secure, intelligent networks.
The company plans to integrate Esphion's products and technology into its entire product portfolio, including the recently announced Allot Service Gateway.
Allot was floated a year ago, and raised US$80 million, and its current market capitalisation is US$105 million.
Calls to Esphion's Auckland office yesterday were not answered, but companies registration records showed directors included Mark Edwards, of Princes Wharf, and Kory Fagan, of St Heliers. Other directors include Charles Childers, in Las Vegas, Andy Lark, in California, and Terrie Lloyd, in Tokyo.
The company's 107 million shares were spread between nominee companies and venture capital companies in Wellington and Auckland, with small numbers held by individuals in Auckland.
A former chief executive of Esphion, Greg Cross, who previously headed Microsoft New Zealand, claimed at one point that software developed by the start-up would make it a world leaderin the fight against internet"worms".
Recently Esphion said its "breakthrough technology" used neural, behaviour-based analysis to detect threats and aggressive attacks on computer networks within seconds.
- NZPA
