In an exclusive interview with "Globes", the first with the Israeli press, SafeNet Inc. president and COO Christopher Fedde says that he has been able to allay most of the fears among Aladdin's employees, and that the merger with SafeNet will actually open new doors for them.
Vector capital, which owns SafeNet and has completed the takeover of rival Aladdin Knowledge Systems, plans to merge the two information security companies. Vector waged an aggressive campaign to take over Aladdin. After most of Aladdin's institutional investors agreed to a sale, Aladdin founder, chairman and CEO Yanki Margalit was forced to concede and sign the deal to sell the company for $160 million in cash. He personally made $20 million, but his stake was worth twice that amount a year ago.
Fedde appears to be optimistic and a calm on this last point. He also listed the advantages of having an owner like Vector, and he made sure to praise Margalit.
Fedde uses diplomatic language to describe the fight to acquire Aladdin. As far as he is concerned, the hostile takeover was made by Vector, not by him, and he is now looking ahead to a common future.
Fedde says, "There is a special advantage in being a private company under Vector, because Vector helps make strategic ties between companies, while it doesn’t intervene in the day-to-day business of the companies it acquires. I look at it as our financial partner, even though it has full ownership."
"Globes": Before Vector acquired you, were there talks about a possible merger between SafeNet and Aladdin?
Fedde: "There were talks, but they never went beyond the feeler stage. It was never more than an examination whether Aladdin was interested in doing something like that."
So who ultimately pushed for the deal, Vector or SafeNet?
"This was an acquisition by Vector, not by SafeNet. Vector had already acquired us, it knew that we had an interest in a hook-up with Aladdin, but it saw the opportunity in bringing Aladdin under its wing. This was its move, as well as the timing, and how it was made."
Will you make more acquisitions in Israel?
"Aladdin gave two or three names of Israeli start-ups that complement its technology. These start-ups could definitely suit the merged company as acquisition targets, and we intend to talk with them soon."
As for entrepreneurs who want to know what turns a start-up into an acquisition target by SafeNet, Fedde says, "Good technology and good people, but also liquidity problems that makes them need us."
Fedde has never met Margalit, who founded Aladdin when he was 22, and is leaving the company after 23 years in the wake of the acquisition. Nevertheless, Fedde has only good things to say about Margalit. "I admire Yanki Margalit, who succeeded in building a company like Aladdin. Anyone who started with nothing and built with his own hands a large and thriving high-tech company is worthy of admiration," he says.
Aladdin's employees and managers also greatly admire Margalit. Isn't it emotionally hard for them to cooperate with you?
"Yanki did good work in choosing managers and helping them grow with the company. All the executives who are staying with us made the perceptional change very quickly, which also testifies to the good work that Yanki did with them. Anyone who wanted and chose to leave was free to do so, and yet only a few managers left. All in all, this merger will only open new doors for Aladdin's employees and managers."
Published by Globes [online], Israel business news - www.globes-online.com - on April 16, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009