Rainbow Technologies Completes Acquisition of Chrysalis-ITS

Acquired software products complement Rainbow's already existing digital identity management software, the company says

Irvine, CA September 10, 2003 Rainbow Technologies Inc., an information security solutions provider, today announced that it has completed the acquisition of Chrysalis-ITS, a privately-held hardware security manufacturer with headquarters in Ottawa, Canada.

Rainbow acquired Chrysalis for $20 million in cash, and the company expects the transaction to be accretive to earnings in the fourth quarter of 2003. Revenue for Chrysalis for the first six months of 2003 was $4.7 million and for the second half of the year, is expected to increase 20 percent over that period.

According to Rainbow, Chrysalis is a vendor of hardware security modules, servers and appliances for such applications as electronic financial transactions, SSL-based Web applications, smart card issuance, online credit card validation, electronic document security, digital identity and XML transactions. Founded in 1994, the company has about 70 employees, with regional offices in Ottawa, the United Kingdom, Germany and Hong Kong.

"This is an important step in our acquisition strategy that complements our product line and customer base," said Shawn Abbott, president of Rainbow eSecurity. "The combination of Luna, iGate and iKey provides a solution for managing digital identities for our mutual enterprise, healthcare and financial customers."

He added that Chrysalis has already established a leadership position in the category of root key protection, and its Luna products, which protect the underlying architecture of security, are complementary with Rainbow's iKey and iGate products.