Intel tackles VPNs with Shiva buy

Intel has announced it will buy Shiva, a maker of remote access and virtual private network products for small and medium-sized businesses, for about $US185 million. Intel does not plan any immediate changes to Shiva's product line, though it will eventually be integrated into Intel's own networking product line, according to a spokesman. Separately, Intel is also taking a stake in software maker Relativity Technologies.

Intel has announced it will buy Shiva, a maker of remote access and virtual private network products for small and medium-sized businesses, for about $US185 million.

Separately, Intel is also taking a stake in software maker Relativity Technologies.

Under the terms of the Intel-Shiva definitive merger agreement, each share of Shiva stock will be converted into the right to receive $6 per share in cash, except for shares held by stockholders who exercise statutory appraisal rights, according to a statement from Intel. Shiva will become a wholly owned subsidiary of Intel and will be part of Intel's network products division, the statement said.

Intel does not plan any immediate changes to Shiva's product line, though eventually it will be integrated into Intel's own networking product line, according to Mark Christensen, who is with the network products division at Intel.

Though networking does not immediately make most people think of Intel, networking is important to the company, Christensen said.

"The Intel architecture can play a major role in networking," Christensen said. "We embed networking in everything we do."

No immediate layoffs are imminent for Shiva's approximately 450 employees, but Intel did not rule them out entirely.

"We don't see any major impact but there will be some shifting of resources," Christensen said.

One analyst said that no leader has yet emerged in virtual private networking and Intel could certainly claim a major space in offering that type of remote access. For $185 million, Intel gets to test the market, which was a smart move, said Brad Baldwin, an analyst with market researcher International Data in Framingham, Massachusetts.

"I think that Intel sees that the growth is still there for remote access," Baldwin said.

Approval by Shiva stockholders and regulators has not yet been secured, but baring problems the acquisition is expected to take between 30 and 60 days, according to Intel.

Separately, Relativity today announced that Intel has made an investment in it of an undisclosed amount. Relativity makes applications, including RescueWare, that are designed to automate the migration of legacy computer applications to Internet and client/server architectures.

As part of the investment, the two companies will market jointly Relativity's software, according to a statement from Relativity.

Intel, in Santa Clara, California, can be reached at +1-408-987-8080 or at http://www.intel.com/.Shiva, which was founded in 1985 and is based in Bedford, Massachusetts, can be reached at +1-781-687-1000 or http://www.shiva.com/. Relativity Technologies can be reached in Cary, North Carolina, at +1-919-678-1500 or at http://www.relativity.com/.

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