EMC Buys RSA Security For $2.1B Mary Crane, 06.30.06, 9:52 AM ET
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Shares of RSA Security soared nearly 20% in Friday morning trading after the data storage systems provider EMC announced a takeover of the company worth around $2.1 billion, or $28 per share.
EMC (nyse: EMC - news - people ) management said it expects the acquisition of RSA (nasdaq: RSAS - news - people ), a security software company, to be completed late in the third quarter or early in the fourth quarter of 2006. Once under the EMC umbrella, RSA will operate as EMC's Information Security Division.
The deal is expected to negatively impact shares by 3 cents per share in 2007 but shouldn't impact earnings in 2008, management said.
Standard and Poor's Equity Research analyst Richard Stice maintained a "strong buy" rating and $18 price target on shares of EMC.
Stice said the proposed price for RSA was "somewhat expensive," but added that the deal has the potential to improve EMC's business mix, broaden its product portfolio and further penetrate the consumer security storage market.