Gemalto to acquire SafeNet, the worldwide leader in data and software protection
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Monday, August 11, 2014
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danielmjema.blogspot.com
DUBAI, UAE, August 8, 2014/
Gemalto (Euronext NL0000400653 - GTO) (http://www.gemalto.com),
the world leader in digital security, today announced that it has
signed a definitive agreement to acquire 100% of the share capital of
SafeNet, a worldwide leader in data protection and software
monetization, from Vector Capital for US$890 million on a debt free/cash
free basis.
Headquartered
in Belcamp, Maryland, USA, and presently located in 27 countries,
SafeNet is one of the largest dedicated digital information security
companies in the world, trusted to protect, control the access to, and
manage the world’s most sensitive data and high value software
applications. As an example, SafeNet technology protects over 80% of
world’s intra-bank fund transfers and its 1,500+ employees, including
550 cryptographic engineers, serve more than 25,000 customers, both
corporations and government agencies, in over 100 countries. Customers
utilizing SafeNet solutions include Banamex, Bank of America, Cisco,
Dell, Hewlett-Packard, Kaiser Permanente, Netflix, Starbucks and many
more of the world’s best known companies. 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.
As
Gemalto enters into its 2014-2017 multi-year development plan, the
digital world enters a period in which proper control over sensitive
information is 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. With this
acquisition, Gemalto and SafeNet combine the best technologies,
expertise and services available for securing a complete infrastructure:
network, users, data, software, at the core and at the edge.
SafeNet
provides an extensive portfolio of data protection solutions including
HSM1 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.
As an example, HSMs are the
essential cloud-based secure elements generating and protecting the
fundamental cryptographic keys and processing units used by digital
authentication, encryption and signature mechanisms within computer
networks and the Internet. All of these will perfectly complement
Gemalto’s offering of embedded software and portable secure elements,
which are used globally at the other end of the network security chain,
i.e. in the users’ pockets and inside the network-connected terminals.
Once
the acquisition is completed, SafeNet will significantly 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 €1,329 million and €715
million of the 2013 pro forma revenue.
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. 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.
After the acquisition is completed, Gemalto will retain a strong
financial structure with a net debt/EBITDA ratio < 1. The transaction
will be accretive to adjusted EPS (Earnings Per Share) before purchase
price allocation upon completion.
As
a result of the acquired business’s anticipated profitability, growth
and synergies, Gemalto expects to surpass its 2017 profit from
operations2 objective of €600 million by approximately +10%.
“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.
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”, said Olivier Piou, Gemalto CEO.
“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,” said Prakash
Panjwani, SafeNet President and Chief Executive Officer.
“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.”
Habari Zingine
Mjulishe Mwenzako
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