Report: EMC about to buy RSA

RSA Security, responding to a story in The New York Times saying EMC - or at lease one other bidder - is on the cusp of buying the firm, confirmed today that it is negotiating with other companies for a "potential strategic transition."

RSA quietly put itself up for sale months ago, according to The Times report.

"RSA is currently engaged in negotiations with parties regarding a potential strategic transition. No definitive agreement has been reached. There can be no assurance that any agreement will be reached or that a transaction will be consummated," the statement said. "We do not plan to make future announcements with respect to this process unless and until our board has approved a specific transaction and we have entered into a definitive agreement."

RSA’s board is expected to meet by the end of this business week to review bids for a deal, which could be worth as much as $1.8 billion, according to The Times’ report, which was based on anonymous sources involved in the auction process.

EMC, a information security and storage vendor, is based in Hopkinton, Mass. Earlier this year, EMC acquired Authentica, a digital rights management company based in Lexington, Mass.

The report did not rule out that RSA could be sold to another company.

RSA had been active in recent months in acquiring other companies.

Just two months ago, RSA acquired PassMark Security, a leader in online banking authentication solutions, for $44.7 million. RSA said at the time that it expected to earn an additional $4 to $5 million in revenue this year and up to $15 million more revenue in 2007 because of the acquisition.

PassMark may have been best known for its Two-Factor Two-Way solution that validates users through a password and the computer they use to log on, while also authenticating the banking site they are using.

In December of last year, RSA bought Cyota for $145 million - $136 million of which was in cash for the company’s outstanding capital stock, $5.5 million to fund a three-year retention pool and at least $3.5 million for the assumption of all outstanding Cyota stock options.

RSA was expected to add $22 million to $25 million in annual revenue due to the purchase.

Get daily email updates

SC Media's daily must-read of the most current and pressing daily news

By clicking the Subscribe button below, you agree to SC Media Terms and Conditions and Privacy Policy.