SafeNet, Inc.

November 15, 2005 01:30 ET

SafeNet, Inc. Announces Plans to Acquire Eracom Technologies; Transaction Extends SafeNet's Leadership in Protecting Financial Data

BALTIMORE--(CCNMatthews - Nov 15, 2005) -

Company Increases 2006 Revenue Guidance to $305 - $325 Million and Non-GAAP EPS to $1.80 to $2.00

SafeNet, Inc. (NASDAQ:SFNT), setting the standard for information security, today announced that it has signed a definitive agreement to acquire all equity interests of Eracom Technologies AG. Under the terms of the agreement, SafeNet will pay a cash consideration of approximately $25 million. This transaction is expected to be accretive within one quarter after the acquisition close, which is expected in December of this year.

"This acquisition enhances SafeNet's Borderless security offering, one of our identified high growth drivers," said Anthony Caputo, Chairman and CEO, SafeNet. "With the addition of Eracom Technologies' products, we strengthen our business in the financial services industry by opening opportunities in the Electronic Funds Transfer (EFT), credit card and ATM markets, new segments of our already established financial services offering. Eracom adds products which complement our technology, including a PC encryption solution expanding our Borderless Security offering. Eracom has an established brand and great customers in the financial industry, particularly in Europe and Asia."

Eracom Technologies' products are synergistic with SafeNet's existing product offerings. Seventy-five percent of worldwide financial institutions today use SafeNet technology for security critical data and communications. SafeNet has been a leading provider of Hardware Encryption Appliances to the transactional security marketplace. Eracom is a global leader providing cryptographic and transaction security solutions that protect credit cards, Electronic Funds Transfer (EFT) and ATM transactions for financial institutions, governments and telecommunications providers.

Eracom also markets an industry leading PC disk encryption system which complements SafeNet's Borderless Solution. This offering will expand SafeNet's end point security solution with disk encryption which is in high demand today by governments, businesses and consumers. These products are used to protect integrity of data on individual PCs and laptops by requiring authentication of the user before the device is booted-up and data is accessed. It is a natural progression for SafeNet to offer customers authentication and local disk encryption from its portfolio. These products complement SafeNet's Borderless Security Solution offering authentication, authorization and VPN.

About the Transaction

A wholly owned subsidiary of SafeNet, Inc., SafeNet Technologies B.V., will acquire, for cash, all equity interests of Eracom Technologies. The closing of the transaction is subject to certain customary conditions, and is expected to take place in December of this year. The Eracom solutions will be integrated into SafeNet's Borderless Business Unit, reporting to Chris Fedde, SVP Enterprise Division.

About Increased Guidance

Based on this transaction, SafeNet is increasing 2006 guidance from $295 - $315 million to $305 - $325 million. The company is also increasing non-GAAP EPS from $1.70 - $1.90 per diluted share to $1.80 - $2.00 per diluted share. Previous SafeNet 2006 GAAP EPS guidance is expected to be between $1.20 and $1.40 per diluted share. Updated GAAP EPS guidance will be provided subsequent to the close of the transaction.

Guidance for the Fourth Quarter of 2005 remains unchanged. Based on the structure of this transaction, the company expects minimal one time charges associated with the transaction.

About SafeNet, Inc.

SafeNet is a global leader in information security. Founded more than 20 years ago, the company provides complete security utilizing its encryption technologies to protect communications, intellectual property and digital identities, and offers a full spectrum of products including hardware, software, and chips. ARM, Bank of America, NetGear, the Departments of Defense and Homeland Security, Adobe, Samsung, Texas Instruments, the U.S. Internal Revenue Service and scores of other customers entrust their security needs to SafeNet. For more information, visit

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

The statements contained in this release, which are not historical facts, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. Important factors that could cause actual results to differ materially are included but are not limited to those listed in SafeNet's periodic reports and registration statements filed with the Securities and Exchange Commission. The Company assumes no obligation to update information concerning its expectations.

Editor's Note: SafeNet is a registered trademark of SafeNet, Inc. All other trademarks are the property of their respective owners.

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