AuthenTec Acquires SafeNet’s Embedded Security
l Combined Company Offers Comprehensive Range of Security and Identity Management Solutions
l Strengthens Engagements with Existing Customers While Broadening Revenue Base
l Acquisition is Accretive in 2010 (non-GAAP) and Significantly Enhances Gross Margins
February 26, 2010 09:07 AM Eastern Time
MELBOURNE, Fla.--(EON: Enhanced Online News)--AuthenTec (NASDAQ: AUTH), a leading provider of
smart fingerprint sensors and solutions, announced today that it has acquired SafeNet, Inc.’s Embedded Security
Solutions Division in a cash and stock transaction which further strengthens AuthenTec’s offering of security and
identity management solutions.
SafeNet’s Embedded Security Solutions products are used in hundreds of millions of communication and network
products to ensure data privacy for businesses and individuals, and are sold to a variety of brand name customers
including HP, Samsung, LG, Ericsson, AMD, Cisco, Alcatel-Lucent, Juniper Networks, Nokia-Siemens and Texas
Instruments among others. SafeNet’s Embedded Security Solutions recorded embedded IP and software revenues
of $15.5 million in 2009 with gross margins exceeding 90 percent and operating income margins of over 20 percent
(the unaudited results of the business are subject to adjustment during the audit process). AuthenTec will also
become the exclusive worldwide supplier of SafeNet’s SafeXcel security processor ICs, representing over $3
million in incremental sales in 2009. The deal is expected to be accretive to AuthenTec’s non-GAAP earnings in
2010, after consideration of the Division’s deferred revenue.
Under terms of the transaction, AuthenTec paid $8.5 million in cash and issued 1.2 million shares (valued at $2.8
million at the closing) of its common stock. The transaction also calls for an earn-out of up to $2.5 million in cash
based on the attainment of certain revenue goals for the remainder of 2010.
“This acquisition continues our transformation f