RSA Security Inc has announced plans to buy Cyota Inc, a privately held online identity and anti-fraud products company, for about $145m, It also said its CFO, Jeff Glidden, has resigned.
Cyota is a New York-based business with 140 staff, which claims to have sold its range of anti-fraud solutions for phishing, e-commerce, and online banking to 50 large financial services organizations, including nine of top 12 North American and UK banks.
RSA Security said yesterday that it expects the deal to add between $22m and $25m in revenue in 2006, and that the $145m mostly-cash transaction is expected to close within 30 days.
John Madelin, director of business development for RSA Security said the target company had products that offered banks a risk-aware approach to authenticating users and high-value, high-volume transactions. He said: Cyota has products that allow banks apply layers of online security, starting with a core risk engine that scans against IP address or a device fingerprint, moving to the use of a collaborative, cross-bank e-fraud network to defend against phishing attempts, and then on to using the business intelligence from that to build a risk-based authentication process which uses the appropriate form of authentication to suit different levels of risk.
Cyota was recently signed up by Microsoft Corp, along with Internet Identity and MarkMonitor Inc, to provide Microsoft with regular updates on confirmed phishing web sites to help shore up its anti-phishing efforts. Phishing often involves the use of fake web sites that resemble legitimate businesses, or organizations that trick victims into disclosing personal or financial information that can then be used in illegal or sinister ways. Some phishing sites last only a few hours or days before they are shut down.
Cyota’s FraudAction anti-phishing and anti-pharming product is designed to scan the internet for such sites to shut them down, perform forensic work, and develop counter measures.
The company also has something it calls Cyota SecureSuite, a Verified-by-Visa payment security platform that allows credit card issuers to offer their cardholders added security while shopping online. SecureSuite is said currently to support the world’s largest 3D Secure programs.
The company’s single focus on the financial service sector and its part in the provision to consumers of strong authentication and transaction protection is very much in keeping with earlier guidance from RSA Security over its future business direction.
In October RSA chief executive Art Coviello told ComputerWire: We expect a significant increase in consumer subscription shipments starting in the fourth quarter and over the next several quarters. We believe this business is poised for tremendous growth. Coviello also said the company will this quarter launch a consumer authentication service that would allow consumers to have one or at most two credentials, that subscribers to our service would be able to leverage across multiple companies.
The Beford, Massachusetts-based vendor said its CFO had resigned to pursue other opportunities with a private venture company. Coviello will assume the duties of CFO until a replacement is named. It also said it will be restructuring its engineering resources, incurring a charge of between $10m and $14m but subsequently saving $4m to $6m annually by relocating 120 positions.