Gemalto to acquire SafeNet for $890 mn

Gemalto has signed a definitive agreement to acquire 100 percent of the share capital of SafeNet from Vector Capital for $890 million on a debt free/cash free basis.

SafeNet is one of the largest dedicated digital information security companies in the world and protects over 80 percent of the 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.

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 cryptographickey management systems, encryption technologies for civilian applications, authentication servers and authentication as a service, as well as sophisticated software license management and monetization solutions.

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.

“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, CEO, Gemalto.

“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,” added Piou.

“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,” said Prakash Panjwani, president and CEO, SafeNet.

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