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RSA buys Cyota for US$145 million

RSA Security said it is buying Cyota Inc. for US$145 million.

RSA Security on Monday said it plans to buy Cyota, the provider of online security and antifraud products, for US$145 million.

The acquisition will allow RSA to offer customers a broader range of authentication techniques. RSA hopes to offer a risk-based authentication approach, allowing customers to choose an authentication method to meet the specific risks they face. Customers will be able to choose from a portfolio that includes watermarking, digital certificates, tokens and smart cards.

In addition to the authentication offerings, RSA also plans to offer Cyota's services such as its antifraud service, which includes fraudulent site shut-down, detection of phishing attacks as well as a transaction-protection service that authenticates credit card users and identifies fraudulent activity in accounts.

RSA expects the acquisition will add as much as US$25 million in revenue in 2006.

The price for the privately held company includes US$136 million in cash for Cyota stock, US$5.5 million in cash to fund a three-year retention pool and US$3.5 million for outstanding Cyota stock options. The deal is expected to close within 30 days.