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Gemalto To Buy SafeNet From Vector Capital In $890 Mln Deal; Lifts 2017 Forecast

Gemalto NV (GTOFF.PK,GTOMY.PK), a Dutch provider of digital security services, Friday said that it has signed a definitive agreement to acquire data and software protection firm SafeNet from private equity firm Vector Capital for $890 million on a debt free/cash free basis. The transaction would be accretive to adjusted earnings per share before purchase price allocation upon completion.

Gemalto also expects its 2017 profit from operation objective of 600 million euros to be surpassed by around plus 10 percent, as a result of the acquired business' anticipated profitability, growth and synergies.

Maryland, USA-based SafeNet is a digital information security company, trusted to protect, control the access to, and manage the world's most sensitive data and high value software applications. SafeNet technology protects over 80% of world's intra-bank fund transfers and its 1,500+ employees, including 550 cryptographic engineers, serve more than 25,000 customers in over 100 countries.

In 2013, SafeNet recorded revenues of $337 million and profit from operations of $35 million. The firm expects revenues of $370 million and profit from operations of $51 million for 2014.

According to Gemalto, the deal adds core network data protection technologies to its authentication offerings that protect the edge of the network, and makes the firm the reference in cloud data, software and transaction security.

Closing of the transaction is expected to occur in the fourth quarter, following approval from the relevant regulatory and antitrust authorities.

The consideration price is self-funded with $440 million from available cash, and $450 million drawn from existing long-term credit facilities, the company noted.

Upon the deal closure, SafeNet would significantly reinforce Gemalto's Identity and Access Management business. It would be a part of Gemalto's Payment & Identity unit, and its Platforms & Services activity.

Olivier Piou, Gemalto CEO, said, "The opportunity to acquire SafeNet has come at exactly the right time, as we have just entered into our new multi-year development plan and there is a perfect fit between Gemalto's "security at the edge" and SafeNet's "security at the core" capabilities. 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."

In Amsterdam, Gemalto shares are gaining 0.76 euros or or 1.10 percent, and trading at 70.03 euros.

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