Gemalto has signed agreement to acquire SafeNet, a provider of data protection and software monetization solutions, for US$890 million.
The transaction is expected to close in Q4 2014.
The purchase price of US$890 million is self-funded with US$440 million from available cash, and US$450 million drawn from existing long-term credit facilities, company officials said.
The acquisition will expand Gemalto’s capabilities in data protection. SafeNet technology, according to officials, protects over 80 percent of the world’s intra-bank fund transfers and its 1,500+ employees, the company said.
“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,” said Olivier Piou, Gemalto CEO.
SafeNet provides an extensive portfolio of data protection solutions including HSM advanced cryptographic key management systems, encryption technologies for civilian applications, authentication servers and authentication as a service, as well as sophisticated software license management and monetization solutions.
SafeNet clientele includes companies like Banamex, Bank of America, Cisco, Dell, Hewlett-Packard, Kaiser Permanente, Netflix, Starbucks and more.
In 2013, SafeNet recorded revenues of US$337 million and profit from operations of US$35 million and expects revenues of US$370 million and profit from operations of US$51 million for 2014.
After the acquisition, SafeNet will significantly reinforce Gemalto’s Identity and Access Management business and will become part of Gemalto’s Payment & Identity segment, and its Platforms & Services activity, that account respectively for €1,329 million and €715 million of the 2013 pro forma revenue.
The acquisition will have a positive impact on Gemalto’s profitability, growth and synergies. According to Gemalto officials, the company will surpass its 2017 profit from operations objective of €600 million by approximately +10 percent.
Commenting on this transaction, Prakash Panjwani, SafeNet president and CEO, said, “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.”