EMC Corporation has announced it has completed the acquisition of Massachusetts-based RSA Security, a company that protects and manages online identities and digital assets. Under the terms of the agreement, EMC paid USD 28.00 per share in cash in exchange for each outstanding share of RSA and the assumption of outstanding options for a total purchase price of approximately USD 2.1 billion, net of RSA’s existing cash balance. RSA Security stockholders have approved the acquisition.
EMC has also signed a definitive agreement to acquire Massachusetts-based Network Intelligence joins market leaders which will create the new information security division of EMC.
Joe Tucci, EMC’s Chairman, President and CEO, said, “Information security continues to dominate the spending intentions of CIO’s around the world. The battlefront in security has quickly shifted from securing the network perimeter to protecting and securing the information itself—wherever that information lives and wherever it moves.”
Operating under the RSA brand, EMC's security division will be headquartered in Bedford, Massachusetts, and led by Art Coviello, the former CEO of RSA Security. Coviello is an Executive Vice President of EMC and the President of RSA reporting directly to Tucci. “It’s becoming critical that security move beyond a point product solution. Customers are in need of security that is built in and broadly distributed within the IT infrastructure to protect people, gear and data as a cohesive solution,” said Coviello.
EMC also announced the establishment of a USD 2.2 billion short-term, unsecured credit facility, which it is using to pay for the RSA acquisition. David Goulden, EMC Executive Vice President and Chief Financial Officer, said, “The availability of this credit facility benefits EMC because it enables us to complete the acquisition while avoiding the cost of monetising our short term investments ahead of normal maturity, providing a efficient way for us to utilise the strength of our balance sheet.”
Additionally, EMC reaffirmed its commitment to spend at least USD 3 billion repurchasing EMC shares during 2006. “When you consider the opportunity ahead of us, EMC stock at these levels continues to be one of the best values in the market, and we will continue to fund our buy back program,” added Goulden.
Immediately following the announcement of EMC’s intent to acquire RSA Security, the two companies assembled cross-functional teams to develop extensive integration plans designed to maximise business leverage and efficiencies. Key areas of integration include:
- Organisation
- Sales, Service and Distribution
- Research and Development
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