RSA to Acquire Cyota

BEDFORD, Mass. -- RSA Security Inc. (Nasdaq: RSAS - News) today announced that it has signed a definitive agreement to acquire Cyota, Inc. A privately-held company based in New York City, Cyota delivers online security and anti-fraud solutions to thousands of financial institutions worldwide. RSA Security is purchasing Cyota for total consideration of approximately $145 million, comprised of up to $136 million in cash for all of the outstanding capital stock of Cyota, $5.5 million in cash to fund a three-year retention pool and at least $3.5 million for the assumption of all outstanding Cyota stock options.

The transaction is expected to close within 30 days, subject to any necessary regulatory approvals and customary closing conditions. RSA Security expects this transaction to add approximately $22 million to $25 million in revenue in 2006 and that it will be accretive to earnings for the second half of 2006.

"Today, RSA Security is the leader in protecting online identities and digital assets. Through our combination with Cyota, RSA Security will become the leader in the protection of consumer identities and remote transactions," said Art Coviello, president and CEO of RSA Security. "Our customers will benefit from enhanced flexibility, and consumers will also be able to enjoy -- through their account providers -- access to strong authentication and transaction protection solutions that fit their lifestyles and security needs."

With the acquisition of Cyota, RSA Security is extending its leadership position in authentication by expanding its portfolio with new products and services. RSA Security expects to be first-to-market with a risk-based layered authentication approach. This approach will allow customers to choose from a range of authentication techniques -- from life questions, watermarking and anomaly detection to digital certificates, tokens and smart cards -- depending on the risks posed and desired convenience. Additionally, RSA Security believes that the acquisition will enable the Company to establish itself as a strategic hub for the consumer marketplace, providing the ability to authenticate and protect all aspects of online banking and e-commerce: end-users, merchants and transactions.

Mr. Coviello continued: "Importantly, Cyota shares our culture of innovation and dedication to customer service. Today's agreement will enable us to jointly drive continued innovation and to build shareholder value over the long-term."

RSA Security Inc.