CA Snares Arcot for Identity Management

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Business software developer CA this week acquired Arcot Systems, a privately held provider of cloud-based fraud-prevention and authentication software applications, as it looks to pad out its identity and access management (IAM) portfolio.

The $200 million, all-cash purchase is expected to close by the end of September and will be "slightly" accretive to CA's (NASDAQ: CA) net income by the end of its fiscal year in March.

Sunnyvale, Calif.-based Arcot provides both cloud-based and on-premises identity management and fraud prevention applications that track more than 1 million credit-card transactions a day.

CA officials said that the addition of Arcot's technology to CA's SiteMinder portfolio of security apps will enable customers to reduce the risk of fraud and identity theft for their online transactions and meet regulatory requirements in a faster, cheaper and more effective fashion.

"Arcot brings to CA Technologies a strong business in fraud prevention and unique capabilities in advanced authentication using a software-only approach," Dave Hansen, general manager CA's security unit, said in a statement. "This acquisition adds industry-leading technology that extends the breadth and depth of our strong IAM portfolio and gives our customers more first-class options for securing their Web-based business."

By spending $200 million for Arcot, Islandia, N.Y.-based CA has now shelled out nearly $1 billion to acquire a variety of cloud-based software companies in the past year.

Last September, CA swooped in to buy NetQoS, a provider of network performance management and service delivery software for $200 million in cash.

Then in February, CA snapped up 3Tera, a privately held developer of software used to build and deploy applications for public and private clouds.

In March, it acquired Nimsoft for $350 million in cash, giving it a cloud-based provider of IT performance and availability monitoring service.

Company officials said Arcot's subscription-based model has been cash-flow positive since the since quarter of 2009, with recurring revenue accounting for almost 90 percent of its total sales each year.

All 165 Arcot employees will be retained and folded into CA's security software unit.

Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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