The Hindu Business Line : RSA Security buys Passmark

US-based RSA Security Inc has acquired PassMark Security, a privately held company based in Menlo Park for a total consideration of $44.7 million. The acquisition is expected to enhance RSA Security's portfolio of adaptive authentication solutions and expand its reach in the financial services industry.

The purchase consideration consists of $9 million in cash and issuance of about 2 million shares of RSA Security common stock.

RSA Security has also set aside $2.7 million to fund employee retention plans and termination costs. The company, according to a release issued here, would reserve close to 80,000 shares of its common stock related to the assumption of PassMark's stock option plan.

RSA Security expects this transaction to add $4 to $5 million to its revenue this year and about $15 million in 2007.

Broadens clientele

"As financial institutions race to address the regulatory community's guidance on stronger authentication, this acquisition, with its ability to expand our eFraud Network, would broaden our distribution network and strengthen our position in the market," Mr Art Coviello, President and CEO of RSA Security, said.

Stating that the company had clearly differentiated itself in the authentication market with a broad-based, adaptive approach, he said the acquisition would add another 20 financial institutions to its consumer online banking portfolio.

`RSA Security is also acquiring PassMark's proven solutions that are currently protecting millions of online users worldwide every day,' he said and added that the company would continue to develop and support these products to meet the needs of customers.

Mr Bill Harris, Co-founder and Chairman, has joined RSA Security's board.

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