SafeNet

SafeNet was an information-security company headquartered in Belcamp, Maryland. It developed and supplied technologies for enterprise authentication, data encryption, cryptographic key management, secure communications, and software monetization. The company also became an important supplier of encryption products to the United States government and served major financial institutions and other organizations that required protected data transmission. The business began in 1983 in Timonium, Maryland, as Industrial Resource Engineering, founded by former National Security Agency engineers Alan Hastings and Douglas Kozlay. It later adopted the name Information Resource Engineering, commonly abbreviated IRE. During the late 1980s, IRE established a position in banking-communications security. Its customers included major United States banks, and its encryption equipment was used in connection with SWIFT, the international interbank transfer system. The company developed an end-to-end encryption system for data transported over X.25 public networks. That work became an early commercial virtual-private-network offering and was later associated with a VPN service launched by MCI Communications. The company expanded through acquisitions and product development. It bought or integrated businesses involved in voice and data networking, cryptography, authentication, encryption appliances, digital rights management, media monitoring, and hardware security. Important transactions included the acquisitions of Gretag Data Systems, Securealink, Cylink, Raqia Networks, the OEM business of SSH Communications Security, Rainbow Technologies, Datakey, DMDSecure, MediaSentry, Eracom Technologies, Ingrian Networks, Beep Science, and Assured Decisions. The 2004 Rainbow transaction also brought the Mykotronx government-security business into the broader SafeNet organization. In 2000, Information Resource Engineering changed its corporate name to SafeNet, reflecting the prominence of its VPN product line. The company remained publicly traded for part of its history, but its share price and corporate structure were affected by industry changes, contract restructuring, acquisition activity, and the technology-market downturn. In 2007, Vector Capital acquired SafeNet for approximately $634 million, taking the company private. The company later sold its MediaSentry business to ArtistDirect and its Government Solutions business unit to Raytheon. SafeNet was involved in an employee-stock-options backdating controversy in the mid-2000s. The matter led to the departures of its chief executive and chief financial officer; the former CFO was later sentenced to six months in prison for manipulating employee stock options. This episode formed a major break in the company's leadership and governance history. In August 2014, Gemalto announced an agreement to acquire all of SafeNet's share capital from Vector Capital for $890 million on a debt-free, cash-free basis. The acquisition transferred SafeNet's enterprise security portfolio into Gemalto. In 2015, SafeNet Assured Technologies was established as a wholly owned Gemalto subsidiary focused on high-assurance data-security products for the United States government. Thales completed its acquisition of Gemalto in April 2019. After that transaction, SafeNet-related activities were reorganized within Thales businesses, including Thales Cloud Protection and Licensing and the government-focused entity later known as Thales Trusted Cyber Technologies. Software-monetization products associated with the former SafeNet business are sold under the Thales Sentinel brand. SafeNet therefore no longer operates as an independent company, although parts of its technology, product heritage, and government-security operations continue within Thales.

SafeNet traces its origins to Industrial Resource Engineering, founded in 1983 in Timonium, Maryland, by former National Security Agency engineers Alan Hastings and Douglas Kozlay. The company later became Information Resource Engineering, or IRE. Anthony A. Caputo became a silent investor in 1986 and took the leadership of the company in 1987. Under this early management, IRE developed security products for organizations handling sensitive communications and financial transactions. In 1988, Lawrence Livermore National Laboratory became the company's first major customer, and IRE moved operations to White Marsh, Maryland. The company went public in 1989, initially trading on the over-the-counter market. During the same period it gained substantial recognition in banking communications security. Seven of the ten largest United States banks became customers, while IRE encryption devices were used in connection with SWIFT. Its work on end-to-end encryption over X.25 public networks provided an early commercial form of virtual private networking. Bank of Montreal and Citibank were among the early adopters. IRE pursued expansion through both product development and acquisitions. It acquired Connective Strategies in 1994 and Swiss cryptographic manufacturer Gretag Data Systems in 1995. In 1996, MCI Communications introduced a commercial VPN service using technology developed by SafeNet personnel, including Charles Brown, in collaboration with MCI technology pioneer Vinton Cerf. The technology was adopted by thirteen of the fifteen largest United States banks within two years. The company nevertheless experienced volatility: its stock fell sharply in 1997 after a restructuring of the MCI contract, and a major shareholder's hostile takeover attempt failed in 1998. In 2000, IRE renamed itself SafeNet, Inc., taking the name of its VPN product line. Co-founder Douglas Kozlay left in 2001 to establish Biometric Associates. SafeNet then used the technology-sector downturn to acquire security businesses at comparatively favorable prices. Transactions included Securealink in 2002; Cylink and Raqia Networks in 2003; the OEM business of SSH Communications Security in 2003; Rainbow Technologies in 2004; Datakey, DMDSecure, MediaSentry, and Eracom Technologies in 2004–2005; and later Ingrian Networks, Beep Science, and Assured Decisions. The acquisitions broadened SafeNet from secure networking into authentication, encryption, hardware security, content protection, and related services. The Rainbow acquisition also connected SafeNet with Mykotronx, a government-security business that had developed cryptographic products for United States agencies. Its product heritage included the KIV-7 family of commercial off-the-shelf cryptographic devices and the KOV-14 Fortezza Plus PC card. These products supported protected voice and digital communications, including use cases involving highly classified government information. SafeNet became one of the largest suppliers of encryption technology to the United States government. SafeNet's corporate history was interrupted by an options-backdating controversy in 2006. The controversy resulted in the departure of the chief executive and chief financial officer. In 2008, the former CFO received a six-month prison sentence for manipulating employee stock options. In April 2007, Vector Capital acquired the company for approximately $634 million and made it private. SafeNet subsequently sold MediaSentry to ArtistDirect in 2009 and its Government Solutions business unit to Raytheon in 2012. Gemalto announced in August 2014 that it would acquire SafeNet from Vector Capital. The transaction moved SafeNet's enterprise authentication, encryption, key-management, and software-monetization portfolio into Gemalto. In February 2015, Gemalto created SafeNet Assured Technologies as a wholly owned subsidiary dedicated to high-assurance security for the United States government. When Thales completed its acquisition of Gemalto on 2 April 2019, the former SafeNet activities became part of Thales. The enterprise software-monetization line is associated with the Thales Sentinel brand, while the government-focused SafeNet Assured Technologies business became Thales Trusted Cyber Technologies. SafeNet no longer exists as an independent company, but its products and technical heritage remain present within Thales's security portfolio.

1. 2019SafeNet activities enter Thales

   Thales completed its acquisition of Gemalto, incorporating the former SafeNet activities into its security businesses.

   Source
2. 2014Gemalto announces SafeNet acquisition

   Gemalto agreed to acquire SafeNet from Vector Capital.

   Source
3. 2007Vector Capital takes the company private

   Vector Capital acquired SafeNet and ended its public-company period.

   Source
4. 2004Rainbow Technologies is acquired

   The transaction expanded SafeNet's portfolio and brought the Mykotronx government-security heritage into the organization.

   Source
5. 2000Company becomes SafeNet

   Information Resource Engineering changed its name to SafeNet, Inc.

   Source
6. 1996Commercial VPN service uses SafeNet technology

   MCI launched a commercial VPN service using technology developed through SafeNet's engineering work.

   Source
7. 1989IRE goes public

   The company completed an initial public offering and began trading over the counter.

   Source
8. 1987Anthony A. Caputo assumes leadership

   Investor Anthony A. Caputo took the helm and the company used the Information Resource Engineering name.

   Source
9. 1983Industrial Resource Engineering is founded

   Alan Hastings and Douglas Kozlay founded the company in Timonium, Maryland.

   Source

SafeNet positioned itself as a specialist provider of high-assurance information security for enterprises, financial institutions, software publishers, and government agencies. Its differentiation rested on cryptography, secure communications, authentication, hardware-backed key protection, and the ability to serve regulated or mission-critical environments.

• SafeNet VPNSecure networking

  SafeNet's VPN technology protected data transmitted across public networks. Its early work supported end-to-end encryption over X.25 networks and was used by MCI in one of the first commercial VPN services. The technology helped establish the company's reputation among banks and other institutions requiring secure communications.

• Enterprise authentication and encryption solutionsInformation security

  The former SafeNet portfolio included enterprise products for authenticating users and protecting data. These offerings addressed organizations needing controlled access, encryption, and centralized security administration, particularly in regulated, financial, and government environments.

• Cryptographic key-management systemsKey management

  SafeNet supplied technologies for managing cryptographic keys and protecting the infrastructure used to encrypt organizational data. The products formed part of the enterprise-security activities later absorbed by Gemalto and Thales.

• KIV-7Government communications security

  The KIV-7 family consisted of cryptographic devices designed to protect digital and voice communications for United States government users. The products were associated with the SafeNet Government Solutions and Mykotronx heritage and supported high-assurance communications requirements.

• KOV-14 Fortezza PlusGovernment cryptographic hardware

  The KOV-14 Fortezza Plus PC card was developed in connection with the National Security Agency's NSSI program and was used with Secure Terminal Equipment. It represented SafeNet's role in supplying specialized hardware-backed security for government communications.

• Sentinel software monetizationSoftware licensing

  SafeNet's software monetization activities covered licensing and protection tools used by software publishers to control entitlements and commercial distribution. After the Gemalto and Thales transactions, these products were marketed under the Thales Sentinel brand rather than as an independent SafeNet line.

• 2019Integrate SafeNet activities into ThalesM&A

  Thales acquired Gemalto as part of a broader expansion in digital identity, cybersecurity, and data protection.

  What changed. Thales completed the acquisition of Gemalto on 2 April 2019.

  Aftermath. Former SafeNet activities were reorganized within Thales, including Thales Cloud Protection and Licensing and the government-focused Thales Trusted Cyber Technologies business.

  Source
• 2015Create SafeNet Assured TechnologiesStrategy

  Gemalto needed a dedicated structure for high-assurance security products and technologies serving United States government customers.

  What changed. Gemalto launched SafeNet Assured Technologies as a wholly owned subsidiary.

  Aftermath. The SafeNet government-security heritage continued in a specialized subsidiary, which later became Thales Trusted Cyber Technologies after Thales acquired Gemalto.

  Source
• 2014Agree to Gemalto acquisitionM&A

  SafeNet's portfolio in authentication, encryption, key management, and software monetization complemented Gemalto's digital-security activities.

  What changed. Gemalto agreed to acquire all of SafeNet's share capital from Vector Capital.

  Aftermath. SafeNet became part of Gemalto, ending its independent corporate identity and enabling its products to be integrated into Gemalto's security portfolio.

  Acquisition value. US$890 million (Agreement announced 8 August 2014)

  Source
• 2012Divest Government Solutions businessStrategy

  SafeNet reviewed its portfolio of government and commercial security activities.

  What changed. The company sold its Government Solutions business unit to Raytheon.

  Aftermath. Raytheon acquired the business unit while SafeNet continued to operate other enterprise-security activities.

  Source
• 2007Accept Vector Capital acquisitionM&A

  SafeNet had experienced governance difficulties and operated in a consolidating security-technology market.

  What changed. Vector Capital acquired SafeNet and took it private.

  Aftermath. SafeNet ceased to be a publicly traded independent company and continued under Vector Capital ownership until its sale to Gemalto.

  Acquisition value. US$634 million (April 2007)

  Source
• 2000Rename the company SafeNetStrategy

  The VPN product line had become a prominent part of the company's identity and commercial activity.

  What changed. Information Resource Engineering changed its corporate name to SafeNet, Inc.

  Aftermath. The SafeNet name became the identity used for the company's broader encryption, authentication, and security portfolio.

  Source

• 2006Stock-options backdating controversyControversy

  SafeNet became involved in an options-backdating controversy. The company's chief executive and chief financial officer resigned, and the former CFO was sentenced in 2008 to six months in prison for manipulating employee stock options.

  Source

• 2019Thales completes Gemalto acquisition

  Thales completed its acquisition of Gemalto, bringing the former SafeNet activities into the Thales security organization.

  M&ALeadership change
  Source
• 2015SafeNet Assured Technologies is established

  Gemalto launched SafeNet Assured Technologies as a wholly owned subsidiary serving United States government requirements for high-assurance data security.

  Product launch
  Source
• 2014Gemalto agrees to acquire SafeNet

  Gemalto announced a definitive agreement to acquire all of SafeNet's share capital from Vector Capital for $890 million on a debt-free, cash-free basis.

  M&A
  Source
• 2012SafeNet sells Government Solutions business to Raytheon

  SafeNet sold its Government Solutions business unit to Raytheon.

  M&A
  Source
• 2009SafeNet sells MediaSentry to ArtistDirect

  The company divested its MediaSentry business to ArtistDirect.

  M&A
  Source
• 2007Vector Capital takes SafeNet private

  Vector Capital acquired SafeNet for approximately $634 million, ending its period as a publicly traded company.

  M&A
  Source
• 2000SafeNet changes its corporate name from Information Resource Engineering

  The company adopted the SafeNet name after the prominence of its VPN product line.

  Other
  Source

1. SafeNet