With its agreement to acquire
privately held data encryption technology vendor, SafeBoot, for $350 million in
cash, announced on 8 October, McAfee, Inc. (NYSE: MFE) has strengthened its position
in the fast-growing data-loss prevention market. Expected
to close in the fourth quarter, the acquisition is the IT security leader''s largest
acquisition since its acquisition of Magic Solutions for $140.3 million in 1988,
and reflects the growing demand in the market for mobile data encryption and data
leak prevention solutions. SafeBoot
is an enterprise security software vendor that is a leader in the rapidly growing
market for data protection via encryption and access control. It delivers enterprise-class
encryption and leads the mobile security market with its fully integrated end-point
security and content encryption solutions. McAfee
says, the acquisition positions "McAfee as the leading security vendor to
offer data loss prevention and encryption at the end-point with scalable centralised
management." The
rationale for the transaction is as follows: - With
the acquisition of SafeBoot, McAfee becomes the leader in a multi-billion data
protection market that is highly under-penetrated
- McAfee
has more than 100 million desktops under management and believes SafeBoot offers
a strong complement to its existing offerings
- SafeBoot''s
end-point encryption franchise coupled with McAfee''s Data Loss Prevention and
ePolicy Orchestrator management capability creates a compelling, industry-leading
data protection solution
- McAfee,
with its worldwide distribution network, expects to leverage SafeBoot''s highly
acclaimed product line which is currently offered in over 20 languages and in
76 countries
- Encryption
addresses all three of McAfee''s market segments from the enterprise of one to
the enterprise of thousands
- Finally,
SafeBoot''s mobile phone offerings will help accelerate McAfee''s current mobile
solutions by allowing McAfee to offer a new comprehensive suite of integrated
device protection and data security.
"SafeBoot''s
industry-leading mobile security solutions address a critical pain point for customers
& emdash; the protection of confidential and proprietary information,"
said Dave DeWalt chief executive officer and president of McAfee. "With the
acquisition of SafeBoot, McAfee becomes a leader in the fast-growing $1 billion
encryption market and we will be able to offer a complete data protection solution
that combines SafeBoot''s device, full-disk and content encryption with McAfee''s
data loss prevention solutions. This combination helps advance our Security Risk
Management strategy and extend our leadership at the end-point." "We
believe this acquisition will deliver a very attractive return for our shareholders,"
said Eric F. Brown, chief financial officer and chief operating officer, McAfee.
"The combination of these two companies creates opportunities to build top-line
synergies and generate additional growth by leveraging the combined product, technology
and sales and marketing capabilities of both companies, to deliver best-in-class
data protection." Based
on conservative assumptions, McAfee expects this transaction to be dilutive to
2008 GAAP earnings per share and neutral to 2008 non-GAAP earnings per share.
Following the closing, SafeBoot''s technologies and McAfee''s Data Loss Prevention
solutions will become the foundation for a new Data Protection product business
unit, headed by Gerhard Watzinger who will report to McAfee CEO Dave DeWalt. SafeBoot
is the encryption vendor to more than 4,200 customers, including more than 150
listed in the Fortune 500. Its customer base is geographically diverse, with about
47 percent in Europe, the Middle East and Asia, 29 percent in North America, and
23 percent in Asia Pacific. The company retained almost all of its customers in
2006. The SafeBoot
Data Protection Suite enables users to encrypt individual files and folders as
well as the entire local hard drive for the widest possible range of mobile devices,
including laptops, smart phones, USB drives and PDAs. SafeBoot data protection
suite also enables users to encrypt file servers and provides protection to ensure
that confidential files remain secure as they move throughout an organization. The
company has focused on the enterprise market and offers centralized management
as well as the ability to integrate with existing IT systems, support for a wide
range of platforms, multiple languages and comprehensive auditing. McAfee
plans to integrate these products into ePolicy Orchestrator (ePO), McAfee''s centralized
management console for enterprise customers. By adding SafeBoot''s encryption technology
and enterprise management tools, McAfee will further advance its enterprise data
protection offerings, and pursue SafeBoot''s significant and untapped opportunities
in the SMB and consumer markets. This combination will enable McAfee customers
to deploy encryption technology that is integrated with McAfee security solutions,
while providing SafeBoot customers with the ability to integrate McAfee products
into their current SafeBoot deployment. "We
view McAfee as the leading dedicated security company, and we believe this combination
will result in tremendous opportunities for SafeBoot, our customers, and our employees,"
said Gerhard Watzinger, chief executive officer of SafeBoot. "As we combine
McAfee''s resources and SafeBoot''s technology and capabilities, we will be even
better equipped to help our customers address the complex challenges of managing
their data security, and position both companies to capture new opportunities
in our rapidly growing markets." "We''re
delighted that Gerhard and his team will be joining McAfee and we believe that
the
talent and know-how of SafeBoot''s employees will play an important role in our
future success," said DeWalt. "The new product business unit will build
on both companies'' data protection offerings, helping us integrate and deliver
market leading new solutions for data protection." The
acquisition is expected to close in the fourth quarter of 2007 pending regulatory
reviews.
Acquisitions |
Year
| Acquisitions
| Pooling
of Interests | Purchase
Transactions | 2007 | SafeBoot
Holding B.V. | |
350 million
| | Citadel |
|
60 million
| | Onigma |
|
20 million
| | Preventsys |
|
|
| SiteAdvisor |
|
70 million
| 2005 | Wireless
Security Corp. | |
|
2004 | Foundstone,
Inc. | |
|
2003 | Entercept |
|
|
| IntruVert |
|
|
| Deersoft |
|
|
2002 | Traxess |
|
|
| Bysupport |
|
|
1998 | Syscon |
1,230 shares
| |
| Nordic |
30,508 shares
| |
| Magic
Solutions | |
140.3 million
| | TIS |
6,755,540
shares | |
| Secure |
567,000 shares
| |
| CSB |
9,815 shares
| |
| QA |
305,557 shares
| |
| Anyware |
228,204 shares
| |
| Dr.
Solomon''s | 15,813,142
shares | |
| CyberMedia |
|
174.3 million
| 1997 | Jade
K.K. | |
|
| Schuijers
Holdings B.V. | |
|
| 3DV
Technology, Inc. | |
|
| Compusul
Consultores de Informatica, Ltda. | |
|
| Cinco
Networks, Inc. | |
|
| Paradigm
Agency Pty Ltd. | |
|
| Helix
Software Company | |
|
| Pretty
Good Privacy, Inc. | |
|
| Network
General Corporation | |
|
1996 | Vycor
Corporation | |
|
| Assets
acquired from Interactive Distributed Systems Software |
|
|
| FSA
Corporation | |
|
1995 | Saber
Software Corporation | |
|
| AIM
Technology | |
|
| IPE
| |
|
| Assurdata |
|
|
1994 | Brightwork
Development | |
|
| Automated
Design Systems, Inc. | |
|
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