EMC Buys Archer Technologies - Analyst Blog

EMC Corp. (EMC), a leading information infrastructure solutions provider and data storage company announced the acquisition of Kansas-based Archer Technologies, a privately-held governance, risk and compliance (GRC) software provider. Financial terms of the deal were not disclosed.
 
Archer's software helps companies develop business software, data and security policies for complying with industry and government regulations. Archer will provide EMC with a flexible platform of broad enterprise GRC capabilities that will augment the security and governance, risk, and compliance capabilities of EMC Consulting.
 
EMC's acquisition of Archer is expected to close in the first quarter of 2010. The transaction will not have any impact on EMC’s revenues or earnings for the fiscal year 2010.
 
Upon completion of the acquisition, Archer will continue to operate from its current headquarters in Overland Park, Kansas, however it will become a part of EMC’s RSA unit (the security division of EMC).
 
EMC said that the acquisition will help expand its product portfolio and deliver expertise and leadership to clients, who will be better able to visualize and manage risk throughout their IT infrastructure. The company also said that Archer's software complements its own security and data loss prevention technology.
 
The combination of Archer’s information risk management and information security with EMC's RSA Security Division will significantly extend EMC's solutions portfolio for visualizing and managing risk, enabling customers to automate GRC visibility and policy enforcement across both physical and virtualized IT environments.
 
Archer had more than $30 million in revenue bookings last year, an increase of $7 million from the year-ago period. The company will add approximately 100 employees this year.
 
In our opinion, the acquisition is a good fit, enabling EMC to expand its product offerings in the security and software business. The acquisition will also provide higher synergies beyond 2010. Moreover, to grow market share in the data center and security business, as well as the enterprise market, EMC has entered into a strategic alliance with Cisco Systems (CSCO) and VMware (VMM).
 
We maintain our Neutral rating on EMC.
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