RSA acquires PassMark

RSA Security Monday announced it has acquired PassMark Security, a privately-held provider of software-based authentication software, for $44.7 million in a combined cash and stock-swap deal consisting of $9 million in cash and the balance in RSA common stock.

PassMark’s authentication software is primarily used by financial institutions to offer their customers a stronger form of authentication than simple passwords by asking them to identify images and phrases, a process that also helps thwart phishing attacks by validating the Web site to the customer.

RSA CEO Art Coviello said the acquisition of PassMark, from Menlo Park, Calif., broadens RSA’s portfolio of security products and brings additional market experience to RSA, whose primary focus in the past has been hardware-based tokens and encryption products.

RSA last December began branching out beyond its traditional expertise when it acquired Cyota, whose combined products and services are mainly used by banks for risk-based fraud analysis and prevention.

PassMark Chairman Bill Harris called joining forces with RSA “the right move at the right time.” RSA also announced it has appointed Harris to its board of directors.

In related news shared with Wall St. analyst, RSA said it anticipates its revenue for the second quarter of 2006 to be in the range of $89 million to $94 million, compared with previous estimates of $88 million to $92 million.