European smartcard security vendor Gemalto has announced a deal to buy US cloud and encryption management vendor SafeNet for $890 million (£530 million).
Tech firms make acquisitions for a variety of reasons but the SafeNet buy is definitely one of rational diversification for Gemalto.
The latter is known for its card and embedded identity management technology at which it has excelled in a dull, European way. SafeNet's portfolio has poenty of depth but the attractive core is the authentication and encryption key management systems that are becoming critical to cloud security and enterprise application deployment.
"The opportunity to acquire SafeNet has come at exactly the right time, as we have just entered into our new multi-year development plan and there is a perfect fit between Gemalto's 'security at the edge' and SafeNet's 'security at the core' capabilities," said Gemalto CEO, Olivier Piou.
"This will enable us to further accelerate the deployment of strong security solutions in the Enterprise sector, and expand our technologies and growth opportunities in protecting online access."
Currently owned by Vector Capital, which took it private in 2007, SafeNet then built itself slowly, partly through acquisition. Probably the best known of those were the purchases of Ingrian Networks in 2008 and Aladdin Knowledge Systems in 2009. Further back in time it toyed with the idea of Acquiring Alex van Someren's UK encryption startup nCipher.
In 2012 it did buy another UK outfit, Cryptocard, for its cloud-based authentication system used by, among others, Oxford University.
A lot of this steady eddy approach has to do with SafeNet's unfashionable origins in the 1980s, the era in which enterprise security was seen as worthy but completely uninteresting to the new masters of the universe. Gemalto itself was formed from a 2006 merger between Gemplus and Axalto, hence the rather awkward name adopted by the combined entities.
Hopefully SafeNet's interesting recent collaboration with security expert Richard Steinnon, the Breach Level Index (BLI), won't fall by the wayside as a new management decides priorities. That attempted to rate data beaches by severity instead of simply their size.