Mergers &acquisitions: October 2004

In that light, Computer Associates’ decision to acquire identity management software vendor Netegrity is no surprise. But the deal bears closer inspection. By offering $340 million for Netegrity, CA is paying over five times its 2003 revenues. There were other suitors, which may have inflated Netegrity’s price, but it also shows how keen CA was to get its hands on its SiteMinder single sign-on and security policy manager. Based on a growth rate of 34% in the first half of the year, Netegrity was expected to close 2004 with annual revenues of $105 million.

As that suggests, identity management has been generating a lot of heat among IT managers. CA, with its weak track record for innovation and tarnished corporate reputation, could use a hit product. It is looking to its security software wing as the springboard for that. The Netegrity buy-out is its second such purchase in recent months: in August the company bought anti-spyware software vendor PestPatrol for an undisclosed sum.

CA is not alone in wanting to pick up security technologies. Networking systems giant Cisco revealed its intention to buy security gateway vendor Perfigo for $74 million, its third security acquisition of 2004. Founded in May 2002, Perfigo offers CleanMachines, user admission control software that enforces security policies at the point of network logon, providing additional capabilities to those already offered in Cisco’s own Network Admission Control. Cisco earlier acquired desktop security company Twingo and network management service provider Netsolve.

Open source distributor Red Hat also bolstered its security portfolio by acquiring the software assets of Netscape Security Solutions from America Online. Red Hat will gain directory service and certificate management technology, which it intends to ‘open source’ by October 2005. Open source versions of these tools remain scarce; Red Hat hopes to stimulate development, enabling it to compete with proprietary alternatives.

But being swallowed up by the big fish is not the only option for smaller vendors. Enterprise IT security consultants TruSecure and BeTrusted have agreed to merge, forming a new company, CyberTrust. The deal is intended to give them the scale to compete with the likes of Symantec, VeriSign and McAfee in the burgeoning market for managed security services.

Mergers and aquisitions in October
Acquirer   Activity   HQ   Target   Activity   HQ   Price  
Actional Web services mgmt s/w US Westbridge Technology Web services/SOA security s/w US n/a
Arbortext XML-based publishing s/w US Advent3B2 Publishing s/w UK n/a
Ascential Software Data integration s/w US iNuCom Data warehouse s/w dev India n/a
Avaya Business comms s/w &services US Tenovis Communications s/w &services Germany $370m
Betrusted/Ubizen IT security s/w &svcs US/Belg TruSecure Security s/w US n/a
Cisco Networking products US Dynamicsoft Session Initiation Protocol solns US $55m
Cisco Networking products US Perfigo Network access control s/w US $74m
Computer Associates Systems software products US Netegrity ID management s/w US $430m
Corel Graphics, office s/w Can Jasc Software Graphics s/w US n/a
EMC Storage systems US Dantz Development Backup s/w for SMEs US $50m
Francisco Partners (GXS) Private equity firm US G Intl (IBMs EDI business) Electronic interchange services US n/a
Getronics IT services Holland PinkRoccade IT services Holland E338m
IBM Systems, s/w &services US Systemcorp Project portfolio mgmt s/w Can n/a
Iron Mountain Outsourced records mgmt svcs US Connected Corp Online backup s/w &services US $117m
Logility Supply chain mgmt s/w US Demand Management Supply chain planning s/w US $9.5m
NTL Cable network services UK Virgin Net Internet services provider UK n/a
Progress Software Dev, DBMS, integration s/w US Persistence Software Object database &dev s/w US $16m
Qualcomm Wireless technologies US Trigenix Mobile user interface s/w UK $36m
Quantum Backup systems US Certance Tape backup systems US $60m
Red Hat Open source distributor US Netscape Security Solutions Directory server/security s/w US n/a
Storage Technology Storage systems US Storability Storage resource mgmt s/w US n/a
Tektronix Communications monitoring s/w US Inet Technologies Data/voice network mgmt s/w US $340m
Tibco Software Business integration s/w US General Interface Composite appln dev s/w US n/a

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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