Ottawa's Chrysalis-ITS, acquired in August for US$20 million by Rainbow Technologies Inc., has another new owner after Rainbow announced Wednesday it is being bought up.
Baltimore's SafeNet Inc., a developer of network security technology, is acquiring California-based Rainbow in a stock deal worth $457 million. The deal is expected to close early next year (all figures in U.S. dollars).
Rainbow announced its acquisition of Chrysalis-ITS in August and wrapped up the deal early in September.
Chrysalis is a nine-year-old maker of security hardware for applications such as electronic financial transactions, smart cards, document security and digital identification. The company's products are expected to compliment Rainbow's own line of security products.
Chrysalis' brands include Luna, iGate and iKey. Luna is Chrysalis' core line of hardware and software for secure e-commerce, including electronic banking.
Word of the deal merger deal between Rainbow and SafeNet came during Rainbow's earnings release Wednesday evening.
Rainbow reported a net profit of $2.7 million, or 10 cents a share, for its Q3, compared to $1.8 million, or seven cents a share, last year. Revenues rose to $35.4 million, up 17 per cent from last year.
"The company found early success in cross-selling the iKey and Luna products from Rainbow-Chrysalis, and the integrated worldwide sales organization is now actively introducing iKey and Luna together to Rainbow's combined installed base resulting in stronger customer relationships and increasing sales volume," Rainbow said in a statement.
Separately, SafeNet said the acquisition will boost its government business by about $70 million. Its government clients include the U.S. Department of Homeland Security, the Federal Reserve Bank, the U.S. Postal Service, the U.S. Department of Defense and the FBI.
"We have complementary products, a similar culture that values very highly strong security, and awareness in the community for system level security. It made sense to combine companies," Anthony A. Caputo, SafeNet's chairman and CEO, said during a conference call Wednesday evening.
SafeNet also released its Q3 results Wednesday, with net income of $2.6 million, or 20 cents a diluted share, compared with $800,000, or 10 cents a share, last year. Revenues almost doubled, to $17.6 million.
