Very nice article by Ken Schachter over on the Red Herring site yesterday. Aladdin Knowledge Systems, the Israeli security firm that was recently in the news after acquiring the Secure Computing SafeWord product, was itself the target of a takeover bid. The bid comes from Vector Capital, the backers of SafeNet. The opening bid was rejected, but this looks like the typical negotiating dance, so I expect we will see more activity in the coming weeks.

Aladdin has an interesting mix of encryption products as well as the eSafe line of web and content security appliances. It is not clear to me if Vector’s intention is to merge companies, but that would make sense. It While Aladdin has a great deal of overlap with what SafeNet provides, there are considerable synergies as well, both in the areas of a combined DRM offering, content filtering as well as Aladdin’s products possibly utilizing SafeNet hardware. Regardless of long term vision and synergies, with Aladdin Q2 revenue slump and 52 week low share price, they are an attractive target. It will be interesting to see how this plays out.