SIM card supplier Gemalto agreed to buy U.S.-based data protection specialist SafeNet for $890 million (€664.5 million) in order to better protect its products against security threats including hacking.
Amsterdam-listed Gemalto, which also plays a leading role in providing contactless technology to enable mobile payments and other services based on near-field communications (NFC), said SafeNet will become part of Gemalto's payment and identity, and platforms and services activities once the acquisition goes through.
"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, said Gemalto CEO Olivier Piou.
Gemalto's acquisition of 100 per cent of SafeNet from private-equity firm Vector Capital will be funded with existing cash reserves and debt. Gemalto added that it expects to complete the transaction in the fourth quarter of this year.
The deal comes amid growing efforts globally to protect personal, enterprise and government data from security breaches and hacking. Gemalto noted that nearly 400 million digital data records have been lost or stolen already in 2014, "prompting a significant rise in global awareness regarding the effective protection of data."
According to Bloomberg, more deals could be ahead for Gemalto: the company recently acquired two U.S.-based units of Cardiff Holdings to help customise payment cards for local financial institutions.
Piou told Bloomberg that he was looking for a "happy marriage" in terms of further acquisition prospects, and would not buy companies at any cost.
In 2013, SafeNet recorded revenues of $337 million and profit from operations of $35 million, and expects revenues of $370 million and profit from operations of $51 million for 2014.
Gemalto said it expects to surpass its 2017 target for €600 million in profit from operations by about 10 per cent because of the transaction.
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