SafeNet to acquire nCipher

SafeNet to acquire nCipher

IT security company SafeNet has made a recommended cash offer of 300 pence per share for nCipher, valuing the UK-based encryption firm at £86.1 million.

NCipher has been the subject of takeover talk for many months, following discounting in the market after its acqusition of Abridean in November last year. Since then, the share price has risen 14.5% from a low of 192.5p on 1 December 2005 to 220.5p on 23 January 2006, the last business day prior to the announcement that the firm was in talks with a party that could lead to an offer.

In a statement, the firm says that while growth opportunities remain, the need to position sales as part of larger IT security infrastructure purchases, mean that significant growth would be difficult to achieve on a standalone basis.

For the year ended 31 December 2004, nCipher reported pre-tax profits of £2.1 million on turnover of £14.2 million and had net assets as at that date of £41.0 million.

SafeNet says the acqusition will equip the firm to compete in emerging technologies and vertical markets, including data protection, payments systems, enterprise key management and identity management.

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