Wave Systems Corporation (Nasdaq: WAVX) has completed the acquisition of data loss protection solutions Safend Ltd. for $12.8 million, including $1.1 million in cash and the rest 5,267,374 Wave shares at $2.21 per share.
IDB Holding Corp. Ltd. (TASE:IDBH) venture capital arm Elron Electronic Industries Ltd. (Pink Sheets: ELRNF; TASE: ELRN), Walden Israel, and Intel Capital invested $21 million in Safend. Elron owned 20% of Safend, and reported a $2.5 million loss on the investment as of the end of 2010. It books the company at near zero value. Despite the disappointing exit, the investors may get back more on the investment depending on the performance of Wave Systems' shares.
Wave Systems said that it was acquiring Safend's technology, including port and device control, encryption for removable media, content inspection and discovery. It added that Safend's complementary product suite creates strong cross-selling opportunities into the healthcare, financial and government verticals where data loss protection is a high priority. Safend's reseller channel, combined with its direct sales force and strong presence in Europe and the Middle East, gives Wave Systems new sales resources with access to new market opportunities. Safend has 70 employees at its Tel Aviv headquarters and Philadelphia offices.
Safend CEO Gil Sever co-founded the company in 2003. The company's technology is based on know-how and capabilities he gained in a senior position at the IDF Unit 8200 technology unit. The company's technology focused on anti-hacking and unauthorized removal of data by employees from enterprise systems using DiskOnKey's and other devices, in an effort to tap into privacy and data protection regulations. But as companies such as McAfee, CA Inc. (NYSE: CA) and Symantec Corporation (Nasdaq: SYMC) acquired companies and Microsoft Corporation (Nasdaq: MSFT) developed a solution in-house, Safend was driven to seek a buyer.
Published by Globes [online], Israel business news - www.globes-online.com - on September 25, 2011
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