David Richards and Wire Service

In a move that resembles in reverse the acquisition of storage vendor Veritas by security vendor Symantec, EMC Corporation has announced a definitive agreement to acquire security vendor RSA Security Inc. Under the terms of the agreement, EMC will pay $28.00 per share in cash in exchange for each share of RSA and the assumption of outstanding options, for an aggregate purchase price of slightly less than $2.1 billion, net of RSA’s existing cash balance. The acquisition adds industry-leading identity and access management solutions and encryption and key management software to EMC’s expanding, information-centric security portfolio. The acquisition is expected to be completed late in the third quarter or early in the fourth quarter of 2006, subject to customary closing conditions and regulatory approvals.

“Information security is a top priority among executives around the world, and it has become an inseparable attribute of information management,” said Joe Tucci, EMC’s Chairman, President and CEO, in a statement. “Businesses can’t secure what they don’t manage, and when it comes to securing information, that means simply two things – managing the data and managing access to the data. EMC is the leading provider of information management solutions. Bringing RSA into the fold provides EMC with industry-leading identity and access management technologies and best-in-class encryption and key management software to help EMC deliver information lifecycle management securely.”

RSA provides technologies to secure information no matter where it resides or travels inside or outside of an organization and throughout its lifecycle. With industry-leading authentication, access control, and encryption solutions, RSA helps organizations of all sizes ensure the authenticity and protection of people, information and transactions.

“This acquisition signals a fundamental change in the landscape of the security market,” added Tucci. “EMC is 100% committed to applying the resources required to continue to expand RSA’s leading market share while also tightly integrating their technology with EMC’s products to bring customers the best information-centric security portfolio available.”

EMC’s information-centric security strategy implements an integrated, four-part solution that secures information throughout its lifecycle. The strategy helps customers assess the security of their information, secure their information infrastructure, directly protect their sensitive information, and manage security information and events to assure effectiveness and ease the burdens of compliance. The integration of RSA’s authentication and access management capabilities will build on EMC’s foundation of inherently secure products and processes. RSA’s encryption and key management technology will be central to EMC’s strategy to directly protect the information no matter where it resides within or outside of an organization.

Art Coviello, RSA CEO and President, said, in a statement, “Information security threats are evolving from attacks on the network and the perimeter to attacks on the data itself. These attacks are designed to obtain information, intellectual property and other information that can be exploited for criminal gain. For this reason, security must be an integral part of the information infrastructure, transparently allowing authorized users to easily get access to information. The combination of RSA’s leading security technology coupled with EMC’s best-in-class information infrastructure and financial resources will accelerate the integration of security into the information infrastructure.”

Upon completion of the acquisition, RSA will operate as EMC’s Information Security Division, headquartered in Bedford, Mass. Art Coviello will become an Executive Vice President of EMC and President of the division.