Gemalto Puts Up $890M For Data Protection Co. SafeNet
Share us on: By Tom Zanki
Law360, New York (August 08, 2014, 1:08 PM ET) -- Gemalto, a Dutch developer of embedded software used in electronic cards, said Friday it has purchased data protection company SafeNet Inc. for $890 million from private equity owner Vector Capital, a combination that the companies say strengthens their efforts to fight hackers globally.
The digital security company said the addition of Maryland-based SafeNet Inc., a supplier of encryption technology to the U.S. government and private companies around the world, enhances its ability to make mobile payments and online transactions more secure amid widespread fear about data breaches.
Gemalto is buying SafeNet with $440 million cash and $450 million drawn from existing long-term credit facilities. Closing is expected in the fourth quarter, pending regulatory approval. The Amsterdam-based company said it may refinance credit facilities through a bond issue or other means later.
Gemalto makes smart chips embedded in widely used products like SIM cards, banking cards, tokens, electronic passports and identification cards. Gemalto CEO Olivier Pious said the deal combines its "security at the edge" technology with SafeNet's "security at the core" capabilities.
"The opportunity to acquire SafeNet has come exactly at the right time," Pious said in a statement. "This will enable us ... to expand our technologies and growth opportunities in protecting online access. Overall, our global leadership and digital security will be reinforced."
SafeNet's data protection technology is used globally are used to protect more than 80 percent of the world's intrabank fund transfers. The $337 million revenue company's customers include Bank of America Corp., Cisco Systems Inc., Dell Inc., Netflix Inc. and Starbucks Corp.
SafeNet expects the deal to improve its access to banking and telecommunications clients. It will join Gemalto's payment and identity segment.
"Our products and routes to market are perfectly complementary and our visions for the future naturally intertwined," SafeNet CEO Prakash Panjwani said.
Gemalto, whose revenue is estimated at $3.2 billion, expects the merger will enable it to boost its operating profits 10 percent by 2017.
SafeNet, headquartered in Belcamp, Maryland, was bought by California equity firm Vector Capital for $634 million in 2007. About one third of SafeNet's 1,600 employees are cryptographic engineers.
Shearman & Sterling advised SafeNet and Vector Capital on the transaction, led by mergers and acquisition partners Steve Camahort and Dana Kromm. Other lawyers involved include partners Larry Crouch, tax; and Richard Hsu, intellectual property transactions.
Counsel information for Gemalto not immediately available.
--Editing by Katherine Rautenberg. |
