IRVINE — Rainbow Technologies Inc. said Friday that it is acquiring a Torrance maker of products to protect software against piracy.
Rainbow, based in Irvine, traded 1.8 million shares of its stock for all the shares of Mykotronx, a privately held company. Though the companies did not disclose the terms of the deal, it would be valued at $29.5 million based on Friday's closing price of $16.38 a share.
Analysts praised the move, saying that Rainbow needed to make an acquisition to increase its long-term profitability. Wall Street responded positively as well, boosting Rainbow's stock price up 75 cents a share to close at $16.38 in Nasdaq trading.
"They have about 60% of the software security market," said John Girton, an analyst with Van Kasper & Co. in San Francisco. "But that business is not growing much anymore." Girton said the acquisition of Mykotronx brings Rainbow closer to its goal of moving into the corporate security market.