Digital security company, Gemalto, will acquire data and software protection provider, SafeNet, from Vector Capital for $US890 million.
In statement, Gemalto claimed the acquisition made it the reference point in Cloud data, software and transaction security, adding core network data protection technologies to its authentication offerings that protected the edge of the network
“The opportunity to acquire SafeNet has come at exactly the right time, as we have just entered into our new multi-year development plan and there is a perfect fit between Gemalto’s 'security at the edge' and SafeNet’s 'security at the core' capabilities," Gemalto CEO, Olivier Piou, said.
"This will enable us to further accelerate the deployment of strong security solutions in the Enterprise sector, and expand our technologies and growth opportunities in protecting online access. Overall, our global leadership in digital security will be reinforced.”
SafeNet president and CEO, Prakash Panjwani, said, “We are very excited for the opportunity to join Gemalto, which is recognized internationally for leadership in the digital security domain. Our products and routes to market are perfectly complementary and our visions for the future naturally intertwined.
“The combination of our portfolios will allow customers to have access to world’s leading security products for mobile and cloud, delivering best-in-class protection of data and identities. This transaction will accelerate the delivery of Gemalto’s security solutions to the enterprise while also making SafeNet’s data protection solutions accessible to the banking and telecom sectors – truly a win-win for everyone involved.”
Headquartered in Belcamp, Maryland, US, and presently located in 27 countries, SafeNet is one of the largest dedicated digital information security companies in the world. It protects more than 80 per cent of the world’s intra-bank fund transfers and its more than 1500 employees, including 550 cryptographic engineers, serve more than 25,000 customers in over 100 countries.
Customers using its solutions include Banamex, Bank of America, Cisco, Dell, Hewlett-Packard, Kaiser Permanente, Netflix, Starbucks and more of the world’s best known companies. In 2013, SafeNet recorded revenues of $US337 million and profit from operations of $US35 million and expects revenues of $US370 million and profit from operations of $US51 million for 2014.
Gemalto said that as it entered into its 2014-2017 multi-year development plan, the digital world entered a period in which proper control over sensitive information was paramount. Nearly 400 million digital data records have been lost or stolen already in 2014, prompting a significant rise in global awareness regarding the effective protection of data.
Gemalto and SafeNet will now combine the best technologies, expertise and services available for securing a complete infrastructure: network, users, data, software, at the core and at the edge, it claimed.
SafeNet provides an extensive portfolio of data protection solutions.
Once the acquisition is completed, SafeNet will reinforce Gemalto’s Identity and Access Management business. It will become part of Gemalto’s Payment & Identity segment, and its Platforms & Services activity, that account respectively for €1329 million and €715 million of the 2013 pro forma revenue.
The purchase price of $US890 million is self-funded with $US440 million from available cash, and $US450 million drawn from existing long-term credit facilities.
Depending on market conditions, Gemalto may refinance the credit facilities through a bond issuance or other means at a later date.
The closing of the transaction is expected to occur in Q4 2014, after approval from the relevant regulatory and antitrust authorities.
As a result of the acquired business’s anticipated profitability, growth and synergies, Gemalto expects to surpass its 2017 profit from operations target of €600 million by at least 10 per cent.