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10/6/2004
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Computer Associates Acquiring Netegrity

CA's $430 million acquisition of the ID-management software vendor is part of a push to strengthen its security product offerings.

Computer Associates, moving to bolster its security product line, said Wednesday that it will acquire identity-management software company Netegrity Inc. for about $430 million in cash.

Computer Associates executives expect the deal, which is subject to regulatory and shareholder approval, to be completed within the next 90 days. Netegrity holds about $90 million in cash and securities, which puts the value of the deal closer to $340 million.

In an interview with InformationWeek this week, CA interim CEO Ken Cron cited security as one of the company's top priorities.

Netegrity is widely known for its identity-management and provisioning applications, including SiteMinder and IdentityMinder. The company's TransactionMinder provides secure access to Web services-based applications.

The acquisition comes just weeks after former CA CEO Sanjay Kumar was indicted by federal prosecutors for allegedly back-dating contracts and encouraging employees to cover up those activities. The software maker also agreed with federal authorities to pay back shareholders $225 million within the next year.

During a conference call with investors Wednesday, Russ Artzt, CA's executive VP for eTrust solutions, said the acquisition will make CA's product offerings in the identity- and access-management market stronger by combining the companies' Web, extranet, and provisioning applications.

There is plenty of synergy between the CA and Netegrity product lines, says Kevin Kampman, practice manager and consulting analyst for directory and security strategies, with the Burton Group. Says Kampman, "The maturity of Netegrity in the access-management and provisioning areas will serve CA well."

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