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nCipher Buys NeoScale

nCipher, a publicly held maker of encryption and security software and hardware based in the U.K., has bought the remaining assets of NeoScale Systems for $1.95 million in cash. nCipher's buying "intellectual property, stock of finished goods, production equipment, and CRM information" from Hercules Technology II LP, a subsidiary of NeoScale's main secured lender and chief creditor, Hercules Technology Growth Capital.

As previously reported here, NeoScale, whose venture funding topped $40 million, closed shop late in November, while management maintained silence to partners, press, and customers. nCipher had confirmed its interest in the remaining assets, following rumors of interest from larger firms like Dell, EMC, HP, and Oracle.

nCipher announced the deal this morning. The company plans to incorporate NeoScale's CryptoStor and KeyVault products into its own roster of data protection wares, though how that will play out isn't clear right now.

"We will continue the NeoScale CryptoStor tape product as a separate line, but we may not maintain KeyVault as a product. We haven't decided... KeyVault can help our own key management," said nCipher VP of marketing Richard Moulds, referring to nCipher's KeyAuthority product.

nCipher will not take on NeoScale's disk encryption products. "The value proposition of disk isn't as great as that of tape," says Moulds.

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