Two Online Security Firms Will Merge in a Stock Deal
Internet security provider Litronic Inc. said Monday that it agreed to merge with Biz Interactive Zone Inc., an online security company headed by former apparel entrepreneur Marvin Winkler.
Under terms of the stock deal, Biz Interactive executives will assume operating control of the combined company, to be named SSP Solutions Inc. Winkler will become co-chairman and chief executive.
Nearly all of Litronic’s 130 workers and Biz’s 30 employees are expected to keep their jobs, said Kris Shah, Litronic’s chairman and chief executive. Both companies are based in Irvine.
Litronic, which encodes computer communications for government and business customers, will contribute technical know-how, the companies said.
Biz Interactive, which already uses Litronic technology, will provide sales and marketing savvy. Biz also has alliances with several tech companies, including Irvine chip maker Broadcom Corp., and a 10-year contract as security provider to Electronic Data Systems Corp., the nation’s second-largest computer services company.
Under the proposal, Biz shareholders will own 53% of SSP, with Litronic shareholders owning 47%. Financial details were not disclosed.
Winkler, the former chief executive of the Gotcha sportswear company, has more recently promoted the Gotcha Glacier, a proposed $130-million indoor skiing facility in Anaheim that has been delayed repeatedly by technical and financial issues, and an online media company focused on extreme sports.
Shah, whose family controls publicly traded Litronic, will become co-chairman of SSP. Shah said he expects to play an active role in the combined company. His family will own about 25% of SSP, named after Biz Interactive’s Secure Service Provider product line.
The companies said they will seek to list SSP on the Nasdaq market under the ticker symbol SSPX. The merger is expected to be completed in June.
Litronic went public in June 1999 at $11 a share, rose to $26 in Nasdaq trading last February, then tumbled as low as $2.34 in December before recovering somewhat. On Monday, the shares rose 37 cents to $6.06.
The company lost $7.5 million during the first three quarters of 2000, compared with a $7.1-million loss for all of 1999. But as last year wore on, its sales volume increased while its losses narrowed.
“We’re headed in the right direction,” Shah said.
Biz Interactive, which was launched in August, hasn’t released any financial data.
