Posted by Virus Bulletin on Jul 28, 2008
€217 million bid launched for encryption specialist.
Security light-heavyweight Sophos has issued official notice of its intention to buy German encryption firm Utimaco, in a share deal worth €217 million (over $340 million US).
Utimaco produces a range of encryption products under the brand name SafeGuard, including solutions for protecting data on disk and in transit from unauthorised access, as well as associated management tools, policy enforcement systems and key and signature technology. The company was founded in 1983, is based in Frankfurt, Germany, and has a global network of subsidiaries. Sophos hopes to integrate the SafeGuard product line into its security lineup while maintaining the branding and recognition value, and has signed on as a reseller in advance of the prospective buyout.
The move is the latest in a series of major investments which has seen Sophos expand its security coverage well beyond its origins in anti-malware, to include anti-spam (with the purchase of Canadian email specialist PureMessage almost five years ago), and network access control (with the acquisition of US-based NAC specialist Endforce in early 2007). It seems likely that Utimaco's encryption technology will eventually be rolled into Sophos's flagship corporate product lines, in a similar manner to previous assimilations.
The value of the deal, expected to complete in October but announced well in advance under Germany's financial regulations, is considerably higher than the current share price of the firm, and also a good way above Sophos' stated cash assets, recently accounted at a shade under $140 million, implying that some kind of investment capital may be obtained. No further details of the exact workings of the deal are expected until the full purchase stage. Sophos remains a privately owned firm, after recent moves to float were shelved due to inhospitable market conditions.