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Rambus gains chip security technology firm

Posted: 17 May 2011     Print Version  Bookmark and Share

Keywords:security technology  acquisition  technology portfolio 

Rambus Inc. has bid to buy Cryptography Research Inc. (CRI), a firm that develops and licenses chip security technology in areas that include content protection, network security, anti-counterfeiting and financial services, for Rs.1,529.02 crore ($342.5 million) in cash and stock.

Rambus expects the deal to close this summer. The company has sold about Rs.446.43 crore ($100 million) in licences to date and claims it has been profitable since its founding.

CRI's customers include Atmel, Infineon, Microsoft, NXP, Raytheon, Renesas, Samsung, STMicroelectronics, Toshiba, and Visa. Some of these companies also license Rambus' memory technologies.

Paul Kocher, CRI's president and chief scientist, helped author the SSL 3.0 standard and define DPA (differential power analysis). CRI licenses technology to prevent DPA, a technique for hacking into systems by monitoring their power consumption. CRI also sells CryptoFirewall, a silicon security block used for a range of applications including pay TV services.

"Rambus will provide our team the perfect home to continue development of technology which addresses an increasingly complex range of security requirements," says Kocher.

"The addition of CRI's world-class security technology is a pivotal step in our strategy to extend our IP leadership and aggressively drive our revenue growth," says Harold Hughes, chief executive of Rambus.

The acquisition marks another step in Rambus' move to diversify into developing and licensing a broadening range of electronic technologies. In late 2009, Rambus acquired lighting and display technologies, which the company now licenses.

The investment is comprised of Rs.747.77 crore ($167.5 million) in cash, approximately 64 lakh shares of Rambus stock and Rs.223.21 crore ($50 million) payable to CRI employees in cash or stock over three years. Rambus has extended offers to hire 30 CRI employees and estimates that this acquisition will be accretive on a pro forma basis in 2013.

The boards of directors of both companies and a majority of the shareholders of CRI have approved the acquisition. The deal is a large one for Rambus which estimates it has about Rs.2,232.14 crore ($500 million) in cash and faces a number of IP court battles.

At least one analyst complained the acquisition cost was "somewhat steep" at three times CRI's revenues. In February, Intel closed its Rs.34,285.71 crore ($7.68 billion) deal to acquire MacAfee to bolster its security and software business.

- Rick Merritt
  EE Times

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