Gemalto to Buy SafeNet for $890 Million

By Dow Jones Business News, 
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PARIS--Digital security company Gemalto NV (GTO.AE) said Friday it will buy SafeNet for $890 million, in a move that broadens the European company's data protection operations and expands its customer base to some of the largest U.S. companies.

Gemalto, which recorded 2.4 billion euros ($3.21 billion) in revenue last year, said the acquisition will boost its operating profit by around 10% in 2017.

Netherlands-based Gemalto said the combination of the two companies makes for a good fit between Gemalto's authentication technology and SafeNet's core network data protection, which includes cryptographic systems used in cloud-based security.

Gemalto said the acquisition comes at a time when there is a rising demand to safeguard sensitive digital information. Already in 2014, nearly 400 million digital data records have been lost or stolen, the company said.

"The opportunity to acquire SafeNet has come at exactly the right time," Gemalto Chief Executive Olivier Piou said in a statement. "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," he added.

SafeNet technology protects 80% of the world's intra-bank fund transfers and the company has 25,000 customers including governments and corporations such as Bank of America, Cisco, Dell and Hewlett-Packard.

Gemalto will finance the acquisition with $440 million in available cash and $450 million drawn from its existing long-term credit facilities. The European company may refinance its credit facilities by issuing bonds at a later date.

Write to William Horobin at william.horobin@wsj.com

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