Websense to Acquire SurfControl

All cash transaction valued at approximately US$400 million, expected to be accretive, with cost synergies of more than US$60 million, creates an organization with the scale to compete more effectively with large global security and software companies, accelerates strategic initiatives with small and mid-sized (SMB) customers, benefits customers and partners through enhanced product offerings.

San Diego— Websense, Inc. (NASDAQ:WBSN) today announced that its subsidiary, Websense SC Operations Limited, has made a pre-conditional cash offer to acquire all of the issued and to-be-issued ordinary shares, excluding treasury shares, of SurfControl PLC (LSE:SRF), a provider of on-demand and software-based Web and email security solutions.

Under the terms of the proposal, SurfControl shareholders will receive 700 pence in cash for each SurfControl share. The proposal values SurfControl’s existing issued share capital at approximately £201 million (approximately US$400 million).

“The combination of Websense and SurfControl is expected to benefit customers, partners and shareholders by creating an IT security solutions company with the scale and product offering to compete more effectively with large global security software companies. Additionally, by improving operational efficiencies, we believe we can generate operating margins in the combined business similar to the historical levels we have achieved in our own Web security business,” said Gene Hodges, CEO, Websense, Inc. “A further objective of the acquisition is to complement and accelerate our stated growth initiatives, particularly in the strategically important SMB segment. We are especially excited about having SurfControl’s BlackSpider® on-demand content security solution available to our global customer base.”

“After the transaction closes, we are committed to supporting SurfControl’s and Websense's customers and channel partners. We believe the combination is a win for the customers and partners of both companies,” added Hodges. “We plan to introduce a customer satisfaction and retention program and pledge to support SurfControl’s layered software Web security solutions at least through 2010. We also plan to enhance these products with data from the merged research databases of the two companies. We also plan to renew existing SurfControl subscriptions at competitive levels, similar to their historical prices. Channel partners are expected to benefit from the opportunity to offer a broader set of solutions to their customers, backed by the threat research capabilities and financial strength of Websense.”

“This proposal offers a significant premium to SurfControl's shareholders which fairly recognizes the value that has been built through the focused strategy of excellence in execution we have pursued,” said Patricia Sueltz, CEO of SurfControl, “I believe that SurfControl today provides a unique combination of security solutions for its customers through software, appliances and ondemand services. The proposed acquisition by Websense represents another major step in the development of SurfControl's business, which will become part of a larger organization better positioned to compete in the growing market for Internet security services. On behalf of the board, I would like to thank all of our employees for the dedication they have shown in pursuit of our goals and the value they have created for our shareholders.”

Financial Benefits - In addition to the improved prospects of the combined company, Websense believes the combination creates the opportunity to deliver significant accretion to earnings and cash flow from operations. The accretion is the result of retaining SurfControl’s anticipated future bookings, while reducing expenses through consolidation and restructuring of the combined operations. Estimates of future bookings assume some customer attrition, which is anticipated to be partially offset by sales of SurfControl products to Websense customers and sales of Websense products to SurfControl customers and by new customer bookings resulting from expanded distribution capabilities. The opportunities for additional sales include selling SurfControl on-demand Web and email security and layered email security products to Websense customers and selling Websense Web security and information leak prevention products to SurfControl customers. The transaction is expected to close approximately four months following regulatory approval by United States (US) and United Kingdom (UK) agencies. Following the close, the combined business is expected to: • Be slightly dilutive to Websense’s non-GAAP earnings per share in the first quarter following the close. | • Be at least 20 percent accretive to non-GAAP earnings in the next 12 months (the second through fifth quarters post-close), with additional accretion thereafter. The estimates of accretion to non-GAAP earnings per share are based on estimates of the future pro forma revenue for the combined company, which exclude the impact of the write-down of an estimated 90 percent of SurfControl’s deferred revenue required by US GAAP purchase accounting. | • Generate incremental pro forma cash flow from operations of approximately $15 million in the next twelve months (the second through fifth quarters post-close), increasing to at least $30 million in 2009 and at least $50 million annually by the end of 2010. These estimates of incremental pro forma cash flow from operations exclude non-recurring cash and non-cash restructuring costs and expenses associated with the transaction and take into account the expected cost savings and estimated net impact of customer attrition and new sales opportunities for the products of both companies. | • Achieve cost synergies of approximately $10 million in the first quarter after the transaction closes, and at least $60 million in the next 12 month period (the second through fifth quarters post-close), prior to any of the non-recurring cash and non-cash restructuring costs and expenses associated with the transaction. The non-recurring cash out-of-pocket expenses involved in obtaining the cost synergies are expected to be substantially incurred within 15 months of the close of the transaction.

The transaction is being financed through a combination of Websense’s existing cash resources and non-equity new banking facilities provided by Bank of America and Morgan Stanley Senior Funding Inc. Additionally, at close, or shortly thereafter, Websense expects to have debt of approximately $180 million to $200 million and cash and marketable securities totaling approximately $50 million. Websense intends to reduce the balance of debt aggressively through internally generated cash flows.

The transaction, which has been unanimously approved by the boards of both companies, is subject to the conditions and the satisfaction or waiver of the Pre-Conditions which relate to the obtaining of regulatory clearances from the relevant UK and US regulatory authorities, as set out in full in Part A of Appendix 1 to the Rule 2.5 Announcement available on the company’s Web site at www.websense.com/acquisition. The proposal will not proceed if the Pre-Conditions and the Conditions (set out in full in Part C of Appendix I to the Rule 2.5 Announcement) have not been satisfied by the close of business on March 26, 2008, or such later date (if any) as SurfControl, Websense and Websense SC Operations Limited may, with the consent of the Panel, agree. Prior to the closing of the transaction, Websense and SurfControl will operate as separate businesses.

Conference Call - Websense is hosting a conference call and simultaneous webcast today at 5:00 p.m. ET (2:00 p.m. PT), to discuss the announcement. To participate in the call, investors should dial 800-795- 1259 (domestic) or 785-832-0301 (international) 10 minutes prior to the scheduled start of the call. The webcast may be accessed via the Internet at www.websense.com/investors. An audio archive of the webcast will be available on the company’s Web site and a taped replay of the call will be available for one week at 888-203-1112 or 719-457-0820, passcode 2084474. About SurfControl SurfControl provides an offering of security solutions to protect its customers from Internet threats, deliver business and regulatory compliance, and enable business continuity. SurfControl believes that security should be treated as a science, delivering protection at multiple points "in the cloud" with on-demand security services, on the network with software and appliances, and on the desktop and mobile client. All of SurfControl’s solutions for Web, e-mail and endpoint security are backed by industry-leading threat detection technologies, delivered by SurfControl’s Global Threat Experts who work 24/7 to provide customers with dynamic zero-day protection. The company protects more than 16 million users in over 25,000 customers worldwide, and employs more than 600 people in offices across Europe, the Americas, and Asia/Pacific.

About Websense, Inc. - Websense Inc., (NASDAQ: WBSN), headquartered in San Diego, Calif., is a Web security and Web filtering software company trusted to protect 25 million employees worldwide. Websense proactively discovers and immediately protects customers against Web-based threats such as spyware, phishing attacks, viruses and crimeware with maximum protection and minimal effort. With diverse partnerships and integrations, Websense enhances its customers' network and security environments.

This press release should be read in conjunction with, and is subject to, the full text of the Rule 2.5 announcement. This announcement does not constitute an offer or invitation to purchase any securities. SurfControl shareholders are advised to read carefully the formal documentation in relation to the Proposal once it has been dispatched.

Forwarding Looking Statements - This announcement includes “forward-looking statements” relating to the Proposal and Websense SC Operations Limited that are subject to risks and uncertainties, including those pertaining to the anticipated financial and other benefits to be realized from the Proposal and the quotation of Gene Hodges. Generally, the words 'will', 'may', 'should', 'continue', 'believes', 'expects', 'intends', 'anticipates' 'plan', 'estimate', 'predict', 'potential', 'continue' or the negative of such terms or similar expressions identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Factors that could cause Websense SC Operations Limited’s actual results, levels of activity, performance or achievements, including the realization of expected financial and other benefits of the acquisition to be materially different from those anticipated in this announcement include, among others: the inability to integrate successfully SurfControl within Websense SC Operations Limited or to realize synergies from such integration; costs related to the acquisition of SurfControl; the inability to obtain necessary regulatory approvals or to obtain them on acceptable terms and the timing of regulatory approvals and the expected closing date of the transaction; the economic environment of the industries in which Websense SC Operations Limited and SurfControl operate as well as facts relating to SurfControl that may impact the timing or amount of synergies that can be realized and that are unknown to Websense. For information identifying additional factors that could cause Websense SC Operations Limited’s actual results, levels of activity, performance or achievements to be materially different from those anticipated in this announcement, see Websense’s SEC filings as updated from time to time, including, but not limited to, the risk factors discussed in Websense’s annual report on Form 10-K for the fiscal year ended December 31, 2006 and its other filings with the SEC, including its quarterly reports on Form 10-Q and its current reports on Form 8-K. This document also includes “forward-looking statements” relating to the Proposal and to SurfControl that are subject to risks and uncertainties, including the benefits of the proposed acquisition of SurfControl by Websense SC Operations Limited. Factors that could cause SurfControl’s actual results, levels of activity, performance or achievements to be materially different from those anticipated in this document include, among others, general economic conditions and changes in local government regulations and policies in SurfControl’s markets.

Many of these risks and uncertainties relate to factors that are beyond Websense SC Operations Limited or SurfControl's ability to control or estimate precisely, such as future market conditions and the behavior of other market participants.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this document and, except as otherwise required by law, neither Websense SC Operations Limited nor SurfControl undertakes to update any of the fsorward-looking statements set out herein, whether as a result of new information, future events, or otherwise US Non-GAAP Financial Measures SurfControl’s historical financial statements for its fiscal year ended June 30, 2006, and its subsequent fiscal quarters are prepared in accordance with the Financial Reporting Standards adopted by the European Union (IFRS). All pro forma combined financial information is based upon a combination of Websense’s historical financial statements prepared in accordance with United States generally accepted accounting principles (US GAAP) and SurfControl’s historical financial statements prepared in accordance with IFRS. SurfControl has not reconciled its historical financial statements to US GAAP.

This announcement also contains certain financial measures that are not calculated in accordance with US GAAP, including pro forma revenue, pro forma earnings per share and pro forma operating cash flow. Websense management believes that these US non-GAAP financial measures provide meaningful supplemental information regarding the expected benefits of the Proposal to investors in Websense.

Websense and Websense Enterprise are registered trademarks of Websense, Inc. in the United States and certain international markets. Websense has numerous other unregistered trademarks in the United States and internationally. All other trademarks are the property of their respective owners.