CA Technologies buys Arcot Systems for cloud security

30 Aug 2010

CA Technologies has signed an agreement to acquire Arcot Systems, a provider of advanced authentication and fraud prevention solutions through on-premises or cloud services.

The transaction was valued at US$200m and adds to CA Technologies’ Identity and Access Management portfolio.

Arcot’s services prevent fraudulent transactions for approximately one million online credit card transactions each day.

CA Technologies hopes that, by combining Arcot’s technology with their CA SiteMinder offerings, it can provide advanced capabilities to help reduce risk, support compliance and secure business transactions.

“Arcot brings to CA Technologies a strong business in fraud prevention and unique capabilities in advanced authentication using a software-only approach,” said Dave Hansen, general manager for the security business at CA Technologies.

“This acquisition adds industry-leading technology that extends the breadth and depth of our strong IAM portfolio and gives our customers more first-class options for securing their web-based business.” 

Arcot too is optimistic about the deal, pointing out how vital identity protection is in the business world.

“Identity is a critical area for security whether you’re talking about in-house or the cloud, and with 120 million identities verified by our solutions today, we bring a strong, solid recurring revenue base as well as sources of new growth opportunities for CA Technologies,” said Ram Varadarajan, president and CEO of Arcot Systems. 

“Arcot’s strong established knowledge and expertise in core security and fraud prevention technology – coupled with IAM solutions from CA Technologies – will offer robust capabilities to our numerous shared customers, particularly in the financial industry.”

CA Technologies has said it has a three-fold cloud security strategy approach: to enable organisations to extend their on-premises IAM systems to support cloud applications; to provide IAM technology to cloud providers to secure their services and to enable IAM services from the cloud.

The cash transaction is expected to be dilutive in fiscal 2011 to CA Technologies GAAP earnings per share and slightly accretive to non-GAAP earnings per share.

The transaction is expected to close by the end of CA Technologies’ second fiscal quarter on 30 September.