RSA Security announced today it has acquired PassMark Security, a leader in online banking authentication solutions, for $44.7 million
As a result, RSA expects to earn an additional $4 to $5 million in revenue this year and up to $15 million more revenue in 2007, according to company statement.
RSA hopes the acquisition positions the company as "a strategic hub for the financial marketplace," the statement said.
"As financial institutions of all sizes race to address the regulatory community's guidance on stronger authentication, this acquisition – with its ability to expand the RSA (anti-fraud network), broaden our distribution network, and add deep domain expertise in consumer authentication – significantly strengthens our position in the market," said Art Coviello, RSA president and CEO.
PassMark is known for its Two-Factor Two-Way solution, which validates users through a password and the computer they use to log-on, while also authenticating the banking site they are using.
"Joining forces with RSA Security is the right move at the right time," said Bill Harris, chairman of PassMark. "As the industry moves to facilitate the mass adoption of identity protection solutions, success will depend on the availability of a full suite of authentication offerings...I am delighted that PassMark's technology will form part of a robust and complete solution from RSA Security."
The purchase price was comprised of $9 million in cash and about two million shares of RSA stock, the statement said. RSA is setting aside $2.7 million to fund employee retention plans and severance fees.
The two companies did not say how many employees could lose their jobs.
"We expect to keep the vast majority of PassMark's Menlo Park (Calif.) team as part of RSA Security," a second company statement said. "On the senior management side, the integration is happening real-time, and we are hoping to retain PassMark's valuable talent so we continue to execute on the delivery of our products and be just as innovative as PassMark and RSA Security have been so far."