SafeNet Announces Combination with Aladdin Knowledge Systems

Proposed Acquisition of Aladdin by Vector Capital to Change the Landscape of the Software Rights Management and Authentication Industries

BALTIMORE
January 13, 2009

SafeNet, Inc., a global leader in information security, today announced that it will strengthen its leadership positions in Software Rights Management (SRM) and Authentication with the acquisition of Aladdin Knowledge Systems Ltd. (NASDAQ: ALDN) by an investor group led by Vector Capital. Aladdin, an information security leader specializing in authentication, software rights management and content security is being acquired in a transaction valued at approximately $160 million.

"By placing these two leaders under common ownership, we have significantly extended our presence in the Software Rights Management and Authentication industries," said David Fishman, Partner of Vector Capital. "Taken together, the companies will enjoy market leadership in both segments, and most importantly, will be even better positioned to provide world class products and enhanced service to the customers."

"In these uncertain economic times, now more than ever, Vector believes in SafeNet's position as a provider of the most important security solutions to the most important commercial and government customers in the world. SafeNet has built a strong and steadily growing company under private ownership and this transaction further extends our presence in two critical industry segments. We are confident that the combined scale, customer base, product breadth and technical strength gives us a tremendous platform for innovation and growth," said Chris Fedde, SafeNet's President and Chief Operating Officer. "Aladdin's customers and employees can feel confident that they are joining a family that is financially strong and well positioned to address the broader customer requirements for rights management and Enterprise data security. We will welcome the addition of the security professions at Aladdin and their well respected product lines."

The two companies' SRM solutions provide software developers and publishers with strong anti-piracy protection, IP protection, and secure licensing and product activation. The Authentication solutions protect sensitive data, information assets and applications for commercial enterprises and governments.

About the Transaction
The transaction is subject to certain closing conditions, including the approval of Aladdin's shareholders, antitrust regulatory approvals, and the satisfaction of other customary closing conditions. There is no financing condition to consummate the transaction.

The transaction is expected to close following the satisfaction of all closing conditions, which is anticipated to occur in the next two to three months.

Once the transaction is completed, Aladdin's product lines will remain. The SRM and Authentication solutions of the two companies, under common ownership, will be led by Prakash Panjwani, SafeNet's SVP and GM of the Rights Management division. Aladdin's customer service and support functions will be combined with SafeNet's global service and support structures, under the direction of Phil Saunders, SafeNet's SVP of Worldwide Sales and Customer Services.

About SafeNet, Inc.
SafeNet is a global leader in information security. Founded more than 25 years ago, the company provides complete security utilizing its encryption technologies to protect communications, intellectual property and digital identities, and offers a full spectrum of products including hardware, software, and chips. UBS, Nokia, Fujitsu, Hitachi, Bank of America, Adobe, Cisco Systems, Microsoft, Samsung, Texas Instruments, the U.S. Departments of Defense and Homeland Security, the U.S. Internal Revenue Service and scores of other customers entrust their security needs to SafeNet. In 2007, SafeNet was taken private by Vector Capital. For more information, visit www.safenet-inc.com.

About SafeNet, Inc.

Founded in 1983, SafeNet, Inc. is one of the largest information security companies in the world, and is trusted to protect the most sensitive data for market-leading organizations around the globe. SafeNet’s data-centric approach focuses on the protection of high-value information throughout its lifecycle, from the data center to the cloud. More than 25,000 customers across commercial enterprises and government agencies trust SafeNet to protect and control access to sensitive data, manage risk, ensure compliance, and secure virtual and cloud environments.  Learn more about SafeNet on Twitter, LinkedIn, Facebook, YouTube, and Google+.