End of an encryption era?

Contact: Ben Kolada

There has been considerable consolidation in the drive encryption sector over the past half-decade, most recently with Dell acquiring OEM partner Credant Technologies. However, with Dell taking Credant off the table, meaningful consolidation may be complete as there are few potential buyers left.

Dell is buying its OEM disk encryption software partner Credant in what could be seen as a tech tuck-in. The acquisition provides Dell with the IP rights to technology it already sells – Credant’s Data Protection Suite was available on Dell’s laptops and workstations as a preconfigured option. Terms weren’t disclosed, but we’re hearing that Credant generated trailing revenue in the $20-30m ballpark. (We’ll have a full report on the transaction in our next Daily 451.)

After earlier rounds of consolidation in this sector by security giants Symantec, McAfee and Check Point Software, there aren’t many potential acquirers left. In fact, it appears that the number of likely targets may outnumber the likely acquirers. Although M&A in this sector seems to be either at its end or near it, two remaining targets we would point to are still-independent vendors WinMagic and Zecurion.

Similar acquisitions to Dell buying Credant

Date announced Acquirer Target Deal value TTM revenue
September 22, 2011 Wave Systems Safend $12.8m Not disclosed
April 29, 2010 Symantec GuardianEdge Technologies $70m $18m
April 29, 2010 Symantec PGP $300m $75m
October 8, 2007 McAfee SafeBoot $350m $60m*
November 20, 2006 Check Point Software Technologies Protect Data [dba Pointsec] $586m $63.8m

Source: The 451 M&A KnowledgeBase *451 Research estimate

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