Aladdin Buys EliaShim for $23 Mln in Cash, Stock

Aladdin Knowledge Systems today announced the acquisition of EliaShim and its subsidiaries, US-based eSafe Technologies Inc. and eSafe Europe. eSafe produces the eSafe Protect suite of Internet security products. As a result of the acquisition, Aladdin will form an Internet Security Unit with eSafe at the core focused on developing integrated ``desktop-to- gateway'' Internet security solutions.

eSafe will be issued 1.24 million Aladdin shares and will receive an additional $6.5 million in cash. ESafe may receive bonuses of up to $5 million based on 1999 revenue performance. Aladdin expects to take a one-time charge in its upcoming Q4 financial reports.

Aladdin, which manufactures hardware for the prevention of copying software, is essentially changing strategies with this acquisition. The move is aimed at conquering a market share in Internet security for organizations while leveraging Aladdin’s existing client base.

According to figures from Forrester Research, by the year 2000, 72% of Fortune 1,000 companies will be reliant on Java and ActiveX as part of their intranet and extranet infrastructure, exposing themselves to malicious code infection that could cause damage that would bring a business to its knees. According to Aladdin, EliaShim’s eSafe solution was chosen by "PC Magazine" as the best security accessory for the Internet.

Aladdin CEO Yanki Margalit explained that "Aladdin bought 75 excellent professionals, technology, $5 million in sales, and offices in Seattle, Holland and Israel. Moreover, along with the products we have begun to develop in the fields of smart cards and e-commerce, this deal increases our status in the field of Internet commerce."

See what Aladdin is doing right now on Wall Street.

Published by Israel's Business Arena December 8, 1998

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