Entrust to be acquired by investment firm

Entrust Inc. agreed to be acquired by private investment firm Thoma Bravo LLC in a deal valued at $114 million.

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Authentication, encryption and email security vendor Entrust Inc. agreed to be acquired by a private investment firm, Thoma Bravo LLC in a $114 million deal.

Dallas-based Entrust sells messaging security appliances. The company also sells a suite of software that provides authentication, digital signatures and data encryption technologies. The vendor's technologies integrate with Microsoft Outlook and IBM Lotus Notes and also provide security for Web-based email services.

Entrust said its board approved the deal. Under the terms, the company has the ability to solicit alternative offers from third parties over the next 30 days.

Thoma Bravo said it has made 30 software technology acquisitions in the last five years. It acquired database management vendor Embarcadero Technologies Inc. in 2007. It also includes security information management vendor NetIQ Corp. and information management vendor Datatel Inc. as part of its portfolio.

Mark Diodati, a senior analyst at the Burton Group said Entrust moved into the right markets with its PKI technology and its Web access management and consumer authentication software. But an early acquisition of enterprise ecommerce portals company EnCommerce for $470 million in 2000 and a $50 million acquisition of antifraud detection software Business Signatures may have spread the company too thin, he said.

"Entrust has some good technology, but they're likely a victim of the bad economy," Diodati said. "They've hit some tough times and are probably running out of cash."

Entrust has also come under increased competition from bigger players in recent years while the market has been consolidating. In 2007 McAfee acquired Safeboot LLC and currently has a number of endpoint encryption products in the market. It also acquired Secure Computing last year, bolstering its presence. Other vendors offering similar security technologies are Trend Micro Inc. and Cisco-IronPort. Check Point Software Technologies Ltd. also acquired Pointsec, and Sophos bought Utimaco Safeware Inc. to sell encryption technologies.

Remaining independent players include Credant Technologies Inc., PGP Corp., GuardianEdge Technologies Inc. and WinMagic Inc.

Dig deeper on Vendor Management: Negotiations, Budgeting, Mergers and Acquisitions

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