EMC Confirms Plans To Buy RSA In $2.1B Deal
EMC late Thursday confirmed it plans to acquire RSA Security for some $2.1 billion.
Under terms of the deal, Hopkinton, Mass.-based storage giant EMC will pay $28 a share for RSA, New Bedford, Mass. The companies anticipate the acquisition will close late in the third quarter or early in the fourth quarter, subject to regulatory approvals and other conditions.
The deal is the third large-scale union between a storage vendor and a security company over the past year. Symantec completed its merger with Veritas Software in July, and Network Appliance finalized its acquisition of encryption vendor Decru in August.
While EMC can put a security spin on its storage offerings to justify acquiring RSA's identity management technology, it's unclear how RSA's recent acquisitions of antifraud vendor Cyota and authentication vendor PassMark fit into EMC's product strategy, said Dave Gilden, COO of Acuity Solutions, Tampa, Fla.
"I could see EMC taking on RSA as a wholly owned subsidiary, but as an integrated business [the companies] are very different," said Gilden. The typical EMC solution provider is completely different than the typical RSA partner, he added.
However, in a conference call Thursday, company executives revealed that RSA will form the cornerstone of EMC's newly formed Information Security Division, which will be led by RSA President and CEO Art Coviello, who will also become an executive vice president of EMC.
Joe Tucci, president and CEO of EMC, said plans are to integrate RSA's technology into EMC's product line. "EMC is 100 percent 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," Tucci said in a statement.
Pete Venuta, vice president of sales and marketing at Information Security Technology, a St. Paul, Minn.-based solution provider, is concerned about the implications of RSA being acquired by an organization that isn't traditionally a manufacturer of security technology.
With EMC known as a high-pressure sales organization, and security traditionally seen as a trust-based industry, it's difficult to see where the synergies would lie between the two vendors, Venuta added.
Greg Hanchin, principal of DirSec, a security integrator in Centennial, Colo., isn't surprised by the acquisition because it reflects the growing synergy between storage and security.
"Over the past year, we're really starting to see how storage data security is important from a compliance standpoint," said Hanchin, who thinks EMC will do well with the RSA acquisition.
EMC investors greeted the news of the planned deal by sending EMC shares down as low as $1.15 to $10.10 in Friday morning trading, after closing on Thursday at $11.25. Shares of EMC had rebounded to $10.49 by mid-afternoon.
Shares of RSA, which closed Thursday at $22.88, were up $4.34 at $27.22 in afternoon trading.
*Editor's Note: Story updated Friday afternoon with EMC and RSA stock information.