Microsoft buys Israeli co Whale for $75 million

The companys investors include venture capital firm exSeed, investment bank Goldman Sachs, and BRM Capital.

Bill Gates is investing in Israel. Microsoft (Nasdaq: MSFT) has acquired Israeli security software company Whale Communications for $75 million. The details of the deal have not been officially disclosed and both companies have maintained absolute secrecy about the deal in recent months.

Whale was co-founded in 1998 by president Daniel Steiner and Elad Baron. BRM Capital chairman Eli Barkat serves as Whale Communications chairman.

The company provides secure Virtual Personal Network (VPN) services using SSL encryption. It has turned its focus to the communications market, and is offering enterprises solutions for secure access to knowledge systems and enterprise applications. Whale was one of the first companies to focus on this field back in 1992.

Whale was listed in international accountancy firm Deloitte Touches Europe Fast 500 list of top companies in 2005. Its international sales and R&D centers are located at its headquarters in Rosh Haayin, with two additional sales offices in Britain and France. Whale has had annual sales of millions of dollars in recent years.

Whales investors include venture capital firm exSeed Venture Capital, investment bank Goldman Sachs (NYSE: GS), Plenus Venture Lending Fund, and BRM Capital.

Microsofts previous acquisitions in Israel include Maximal Innovative Intelligence, which it acquired in 2001 for $20 million, and Peach Networks, which it acquired in 2000 for $72 million. Peach was merged with the Microsoft TV division, which closed in 2002. Peach was managed by Moshe Lichtman, who previously managed Microsofts IPTV division, and recently returned to Israel to head up the companys expanding local R&D center.

Microsoft has also hinted that it would be making an intensive entry to the information security field and the acquisition of company with an R&D capacity like that of Whale secure Internet access may well become Microsofts first R&D center in a new strategic field, remote from the companys areas of business.

Published by Globes [online], Israel business news - - on May 18, 2006

Copyright of Globes Publisher Itonut (1983) Ltd. 2006

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