Harford Web firm looks toward Europe

BUSINESS DIGEST

Business Digest

November 16, 2005|By WILLIAM PATALON III | WILLIAM PATALON III,SUN REPORTER

Network-security provider SafeNet Inc. announced yesterday a $25 million, all-cash deal to buy Eracom Technologies AG, a German company whose products are aimed at curtailing identity theft.

SafeNet expects to complete the deal by year's end. Its shares rose $1.78, or nearly 6 percent, to close at $33.88 yesterday.

"We feel extremely good about this deal," said Carole D. Argo, SafeNet's president and chief operating officer. "This is just a great fit for us at this time."

Eracom Technologies, a privately held company near Dusseldorf, is involved in online security, focusing largely on financial-services customers. Eracom has about $10 million in annual revenue and is profitable, SafeNet said. Eracom specializes in encryption of stored data such as credit-card account information.

"The use of data encryption [substantially] increases security, a critical issue today," said Peter Christy, an analyst for Internet Research Group in Los Altos, Calif.

Hackers penetrated the security at a credit-card processing center in June to steal as many as 40 million account numbers. It was the largest theft of personal financial data ever reported.

Eracom's strength in Europe and Asia should help SafeNet expand internationally. The Maryland company's revenue is now 75 percent domestic, Argo said.

The deal would push SafeNet employment to more than 1,000 for the first time, Argo said. About 250 employees are in Maryland, she said. SafeNet is headquartered in Belcamp in Harford County.

Including Eracom, SafeNet forecast revenue for next year of $305 million to $325 million, an increase of $10 million from its previous forecast of $295 million to $315 million.

bill.patalon@baltsun.com

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