Security Architecture, Endpoint/Device Security, Endpoint/Device Security, Endpoint/Device Security, Endpoint/Device Security, Endpoint/Device Security

Sophos bids to acquire endpoint encryption firm

Endpoint security stalwart Sophos has bid to acquire Germany-based encryption provider Utimaco Software for more than $340 million.

If accepted, the offer, expected to be completed by October, will strengthen Sophos' growing endpoint security portfolio and allow the UK-headquartered firm to better compete with North American security powerhouses, such as Symantec and McAfee, said Paul Roberts, senior analyst for enterprise security at The 451 Group.

“I think Sophos is a company that sees the endpoint as the focus of their strategy and Utimaco plays into that,” Roberts told on Monday. “Data encryption is part of the story that enterprises increasingly want to hear.”

The two companies already partner. Sophos resells Utimaco's signature solution, SafeGuard Enterprise, which is an integrated offering that combines device and file and folder encryption with data leak prevention.

Picking up Utimaco would allow Sophos, whose U.S. base is in Boston, to extend its endpoint security portfolio, Roberts said. The company already offers malware detection and network access control on the endpoint.

“Information security should be as commonplace as anti-virus protection – no longer a nice to have but a must have,” Steve Munford, chief executive officer of Sophos, said Monday in a news release. "Companies of all sizes are looking to protect against both external and internal threats, with one manageable solution."

Sophos' major U.S.-based competitors – Symantec, McAfee and Check Point Software Technologies – already have either established partnerships with or acquired endpoint encryption firms, Roberts said. Developing that type of complex technology in house is “not for the faint of heart,” so an acquisition typically makes the most sense, he added.

“They [Sophos] absolutely want to compete with those larger vendors in North America,” Roberts said.

Roberts said the proposed bid is a hefty sum, but Utimaco is a fiscally healthy company, having earned $70 million in revenue from July 2007 to March 2008, a rise of 17 percent over the previous nine-month period.

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