In bid to strengthen its position in the data protection market, McAffe has agreed to buy SafeBoot, a privately held vendor of data encryption technology for $350 million.

SafeBoot’s flagship Data Protection Suite lets user encrypt individual files, folders or entire hard drives to protect data during distribution to mobile devices, including handheld computers, PDAs, laptops, smart phones and USB drives. It can also encrypt file serves to secure confidential business enterprise data.

The acquisition allows McAfee to combine its data loss prevention technology with the data encryption technology of SafeBoot.

Dave DeWalt, chief executive at McAfee, said in a statement: “With the acquisition of SafeBoot, McAfee becomes a leader in the fast-growing $1 billion encryption market and we will be able to offer a complete data protection solution that combines SafeBoot’s device, full-disk and content encryption with McAfee’s data loss prevention solutions.”

Gerhard Watzinger, chief executive at SafeBoot, added: “We view McAfee as the leading dedicated security company, and we believe this combination will result in tremendous opportunities for SafeBoot, our customers, and our employees.”

The acquisition reflects the on-going trend of consolidation of the data security market. While the small and medium size security companies struggle to survive and the large scale companies use acquisitions to integrate more security features into its existing products.

While the acquisition of SafeBoot by McAfee might sound very strategic, only time will tell if the cost of the acquisition will justify the opportunity it generates. For some analysts, the cost is way above the potential value of SafeBoot.

The deal, subject to regulatory review, is expected to be concluded in the fourth quarter of this year.

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Entry was posted on Wednesday, October 10th, 2007 at 11:00 am under Cell phones, Security, Technology.

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