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Original Source: FD (FAIR DISCLOSURE) WIRE
. Tony Takazawa, EMC, VP Global Investor Relations . Joe Tucci, EMC, Chairman, President, and CEO . Dennis Hoffman, EMC, VP Information Security . Art Coviello, RSA Security, President and CEO . Bill Teuber, EMC, Vice Chairman and CFO . Keith Bachman, Banc of America, Analyst . Aaron Rakers, A.G. Edwards, Analyst . Kevin Hunt, Thomas Weisel, Analyst . Brian Freed, Morgan Keegan, Analyst . Rebecca Runkle, Morgan Stanley, Analyst . Ben Reitzes, UBS, Analyst . Andrew Neff, Bear Stearns, Analyst . Frank Timms, Robert W. Baird, Analyst
. Chris Whitmore, Deutsche Bank, Analyst . Erita Clemon, Lehman Brothers, Analyst . Brent Bracelin, Pacific Crest Securities, Analyst
Management reported that the current enterprise value of the deal, which is net of RSA's cash of $230m is slightly less than $2.1b or $28 a share. In 2007, on a GAAP basis, the Co. anticipates the RSA acquisition to be dilutive to EMC's EPS by $0.03. In 2008, the Co. expects the acquisition to be neutral to GAAP EPS and accretive by $0.03 per share on a non-GAAP basis.
S1. Acquisition Details (J.T.) 1. Highlights (Investor Day): 1. Over the last several meetings the Co. has had with analysts
and investors, it talked about EMC's evolution from a storage
co. to a storage and information management co. to what EMC is
classifying itself today as an information infrastructure co.
1. The majority of this transformation from a storage co. to an information infrastructure co. actually happened over the last three years. 2. EMC talked about: 1. Stack of technology and focused on its information lifecycle management offerings of hardware and software starting with its tiered storage, protection software that goes from backup and tape to more efficient and effective disk backup, and disk replication. 2. How it has data mobility storage and how storage virtualization, Invista product was going to revolutionize that layer of information software. 3. Leadership position in archiving software and how it is going to unify that with a common archive and retrieval system. 4. How most of information, more than 70%, is unstructured and how that's being managed with its content management software; putting this information into repositories and then making sure it manages that properly with
checkin/checkout version control and digital rights management.
5. The coming, which it will have at the end of this year, its
intelligent information management software layer, which will feature data classification. 6. How to manage the information lifecycle management stack in conjunction with other assets in the infrastructure, what it was doing in resource management. 7. How virtualization was basically game changing and wrapping that around with services is how it has now categorized its information infrastructure strategy.
8. How the EMC storage business is strong and growing. 9. Its plan over the next several years to sustain double-digit growth.
10. Its goal to grow five business areas into the $1b mark over
the next several years. 11. Content management, which would actually have Documentum and Captiva and several other acquisitions as the foundation. 12. Resource management being one of those $1b goals, which would have Smarts and the SRM Control Center family as a base foundation. 13. Storage virtualization being another one of these $1b opportunities for the Co. with Invista and Rainfinity as the foundation. 14. Goal for information security. 1. The Co. would expect this business in 2007 to start out at about a $500m run rate, which would be the RSA business, plus growth, plus some of the EMC pieces that it also has in the security area.
15. The Co. reports that all these businesses are at least $500m in size, larger. 1. They are growing at substantial double-digit rates.
3. Acquisition: 1. The Co. reports that from a 2006 size, the expectation from the market is that RSA would be about $375m in size. 1. It is a leader in what it does 2. Looking at RSA as according to some of the analysts out there, even a stand-alone, the expectation is to have a CAGR over the next three years of over 20%. 1. The Co. absolutely believes that inside the EMC family,
with the leverage it creates, that will go up from there. 3. EMC fundamentally and deeply believes that the technology co. that seamlessly integrates information storage with information management, with information protection, with information security, and centrally manages and orchestrates this information infrastructure will be a huge winner in the technology marketplace. 1. The technology co. that's going to do that is EMC.
S2. Information Security (D.H.) 1. Details: 1. The focus and the threat have clearly shifted, and the financial legal implications of data loss and data theft are enormous. 2. The reasons are twofold. 1. Today's information security solutions are insufficient to address this shifting threat. 1. They protect resources like networks, servers, and laptops. 2. They protect proxies for information, not the information itself, and they attempt to establish perimeters.
2. Information lives and it moves. 1. It's in constant motion through its lifecycle, whether that's in the form of an e-mail, a backup tape, or a laptop walking out the door every night.
3. EMC reports that the approach to securing information needs to
change fundamentally. 4. The Co. reports that the approach to securing information needs to change fundamentally. 1. It's clear that information security is becoming an information management problem. 2. It's changing from network-focused and perimeter-centric to data-focused and information-centric, and organizations of all sizes are realizing they simply can't secure what they don't manage. 5. The strategy, which the Co. previously articulated, is aimed at addressing this very challenge, comprised of four
integrated elements. 1. Assessing the security of information.
2. Securing the information infrastructure that holds it.
3. Moving beyond the security of the infrastructure to actually
more directly protecting the confidentiality and integrity of data itself. 4. Closing the loop on this process by assuring policy
compliance in a way that doesn't kill organizations with regulation compliance. 1. The foundation of this strategy is securing the information infrastructure and protecting the data.
S3. Acquisition Comments by RSA Security's President (A.C.) 1. Details:
1. Security has evolved as an independent industry because
security was not designed in as IT infrastructure and the Internet were developed. 1. It has become …