Netegrity Pays US$47m For DataChannel

Netegrity , a Waltham, Mass., provider of security software for e-businesses, will buy DataChannel, a Bellevue, Wash., portal developer.

The deal includes $15 million in cash and 2.5 million shares of Netegrity common stock. Based on Thursday trading price of about $13 per share, the total purchase
price is $47 million.

Using DataChannel technology, Netegrity will develop a “management dashboard” to provide centralized administration for all services delivered through its secure
relationship management (SRM) platform.

“Organizations will achieve competitive advantage by removing ‘friction’ and the multiple steps required for e-business transactions and interactions,” said Joe
of PricewaterhouseCoopers’ security practice. “Netegrity’s SRM strategy addresses these issues by providing the integrated platform of security, identity,
integration, and delivery services.”

Netegrity expects the acquisition to close in December and contribute sales of approximately $20 million in 2002. The transaction is expected to pad Netegrity’s
(excluding one-time charges) by the second quarter of 2002.

Earlier this week, the company posted a third-quarter net loss of $2.4 million or 8 cents a diluted share, compared to net income of $911,000 or 3 cents, for the
same period last year. Revenues for the quarter totaled $16.7 million, up from $15.3 million last year.

Analysts polled by Thomson Financial/First Call expected a loss of 9 cents per share.

“The key business metrics for our company continue to be strong despite the tough economy and the tragic events of September 11th,” said CEO Barry
. “The high level of activity in new name accounts, follow on customer deals, and in international markets, are all very positive indicators of a solid

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