SSH Sells its Oem Business To Safenet

SSH Communications Security Corp (HEX: SSH1V) and SafeNet, Inc. (Nasdaq: SFNT), have signed an agreement concerning the sale of assets of SSH’s OEM Products group and VPN hardware businesses (“OEM Business”) to SafeNet.

The purchase price of the OEM Business is about USD 14 million and the whole amount will be paid in cash. The exact cash amount to be paid will be finalized according to standard closing procedures when the transaction is closed. The transaction is subject to the satisfaction of the customary closing conditions, and is expected to be completed by mid November 2003. At that time, SSH’s OEM Business and approximately 25 SSH’s employees will transfer to SafeNet. The employees will join SafeNet retaining their existing employee status. Out of these employees about 20 are located in Finland and the rest of them in the USA and Asia.

During the first half of 2003 the net sales of the OEM Business were EUR 3.3 million (42.6 percent) of SSH’s net sales and the business has been profitable. Therefore this transaction will also effect SSH’s guidance concerning the net sales and profit estimates for the year 2003. SSH’s previous guidance has been that if SSH succeeds well in improving its sales and achieving the targeted EUR 18 million net sales, it is still well positioned to show a profit on the latter half of the year.

The purchase price paid by SafeNet will increase SSH’s profit in 2003. As a result SSH’s profit for the whole year 2003 will be positive. Due to this transaction SSH’s net sales for 2003 are expected to be less that EUR 18 million. SSH will provide more information concerning the effect of this transaction to its net sales and profit for 2003 in its next Interim Report on October 22, 2003.

The OEM Products group includes Toolkits and SSH Sentinel(TM) VPN Client product. Toolkits enable hardware and software manufacturers to incorporate key data security features into their own end products. SSH Sentinel VPN Client provides secure remote access connections and enables OEM customers to extend the uses of their own network equipment. The purpose of SSH’s OEM products is to save customer’s development costs and to help them get to market more quickly.

This transaction is the next step in SSH’s focusing strategy announced in autumn 2002. By concentrating on its core enterprise business and the fulfilling the needs of its main customer groups i.e. large corporations, financial institutions, and government agencies, SSH is determined to allocate its resources more effectively and to improve its opportunities for future growth and profitability. The aim is to strengthen SSH’s leading position as a provider of managed security middleware.

This transaction strengthens SafeNet’s position as a leading provider of Internet security technology that is the de facto standard in the VPN industry. SSH’s products form a natural and important extension to SafeNet’s crypto chips and other OEM products that they are licensing to the world’s leading hardware and software manufacturers, speeding integration and reducing time-to-market for SafeNet customers.

A briefing on this transactions for analysts and the media will be presented at the auditorium on the 1st floor of the SSH head office at Fredrikinkatu 42, Helsinki, Finland, today, Tuesday, October 14, 2003, starting at 2:00 p.m. Access from the corner of Fredrikinkatu and Malminkatu.