Computer Associates to acquire Netegrity for $430 million

Computer Associates International has signed an agreement to acquire Netegrity, a provider of software security solutions, in an all cash merger valued at approximately $430 million or $10.75 per fully diluted common share, or approximately $340 million net of the cash and marketable securities on Netegrity's
balance sheet.

The acquisition is expected to be completed in the next 90 days. 

"CA is aligning its resources and investments with the company's strategic growth opportunities, internal development, geographic expansion, new routes to market and acquisitions," said CA's CEO, Kenneth Cron. "By adding the Web security

product on the market to its portfolio, CA strengthens its position in Identity and Access Management (IAM). Security is important to CA, and we will ensure that we
offer customers the broadest and deepest IAM suite."

"The acquisition would help us broaden our footprint in the emerging Indian security market. Indian organizations are ramping their security requirement and CA will provide the support to ward off security threats," commented Ninad Karpe on the

acquisition.

A recently published IDC study highlighted that the security software market in India will grow at a CAGR of 36% until 2008, touching Rs 481 crore from Rs 105 crore in 2003. The Security 3A software segment is expected to post the highest growth of 42%.

The acquisition is expected to be neutral in fiscal 2005.

CA's COO, Jeff Clarke, said, "I am confident this acquisition will deliver a financial return in excess of our weighted average cost of capital. There is potential for substantial upside through revenue synergies”. As we continue to see opportunities for consolidation throughout the industry, we will leverage these opportunities and build our enterprise infrastructure management strategy," added Clarke. It is anticipated that majority of Netegrity's approximately 400 employees will remain with CA.

"Our customers are looking at reducing costs, increasing productivity and providing secure environments for their businesses," said Russ Artzt, CA's Executive VP for eTrust Solutions. 

eTrust Identity and Access Management Suite is a complete, standards-based solution for automating and integrating identity and access management
across enterprise, customer and partner environments.

CI NEWS BUREAU

MUMBAI