Strengthens play in authentication and software rights sectors
SafeNet Inc has becomes one of the largest dedicated security vendors, with the merger with Aladdin Knowledge Systems Ltd having gone through and the two companies brought together to produce a $500 million business.
Chris Fedde, president and COO told us, “The merger makes us the fifth largest dedicated security supplier with nearly $500 million of combined revenues and 1,650 employees.”
Aladdin was acquired by Vector Capital, SafeNet’s private equity owner, with the intention of creating a business with strong market positions in software rights management and authentication solutions.
Fedde explained that work had been going on behind the scenes for the past six weeks, but now that the transaction was a done deal the businesses would be integrated around complementary product lines.
“The two authentication businesses are to be led by an Aladdin executive and the two software rights management operations will be led by a Safenet executive. Both of them would report into a newly appointed general manager, Prakash Panjwani.”
The company also confirmed that Aladdin’s customer service and support functions will be combined with SafeNet’s global service and support structures, under the direction of Phil Saunders, SafeNet’s SVP of worldwide sales and customer services.
The combined businesses will benefit from complementary sales and distribution channels, and stand to gain by consolidating their research and development efforts, Fedde said.
The new Safenet has more than 25,000 customers. “Aladdin’s authentication and content filtering products will strengthen SafeNet’s enterprise data protection solutions for commercial and government customers. The software rights management solutions will enhance SafeNet’s software anti-piracy products” the company statement read.
“We intend to continue with the two major parts of the business around enterprise data protection and software rights, which are approximately the same size” Fedde confirmed to us. These market segments are peppered with specialist, niche providers but Safenet competes mostly against EMC’s RSA Security in authentication and is up against the likes of Acresso Software Inc in the software rights sector.
Fedde said that while the business was not immune it had not seen any marked impact on sales of the current financial downturn, though he did note some softness in the software rights management sector, with some software vendor customers facing their own pipeline challenges.
The company chief said he was not ruling out further additions to the Safenet business, via the acquisition by Vector of small, niche and complementary product companies. In the past Vector has been behind LANDesk Software, Savi Technology, SafeNet, Corel and Watchguard Technologies.
Fedde also confirmed that a listing was on the cards for Safenet. “An IPO is an expectation. It is going to be dependent on market conditions, but we’re ready,” he said.