EMC buys three more letters for $2.1bn
We'll take R-S-A, Pat
EMC continued its all out shift toward software today by throwing down $2.1bn for security specialist RSA.
Earlier in the day, the New York Times reported that RSA had offered itself up to suitors and that EMC was the most likely candidate to go through with the buy. EMC later confirmed this report by revealing that it will pay $28 per share for RSA. The deal still hinges on customary closing conditions and is expected to be finalized in the late third or early fourth quarter.
The speculation of an acquisition sent RSA's shares up close to 20 per cent on the day to a close of $22.88, which equals a market capitalization of $1.73bn.
The purchase is a smart one for EMC, as it provides leading security technology for protecting the data sitting on EMC's vast array of storage systems.
Over the past four years, EMC has built out a rich software portfolio to cover just about every aspect of storing and managing data. And the company has a proven track record of making good on high-profile acquisitions as evidenced by its $635m VMware buy. VMware is now bringing in hundreds of millions in revenue per year for EMC.
"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," said EMC CEO "Diamond" Joe Tucci. "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."
Both EMC and RSA are headquartered in Massachusetts, and RSA will operate as EMC's Information Security Division. Current RSA CEO Art Coviello will turn into an EMC EVP and President of the security division. ®