MSGI Security Solutions Inc. to complete purchase of AONet

With an eye toward grabbing a piece of a growing market for data recovery, MSGI Security Solutions Inc. has agreed to buy an Italian IT security firm that specializes in data warehousing and secure data storage.

MSGI of New York purchased 51 percent of Milan, Italy-based AONet International in July, and has recently agreed to bring its total stake in AONet up to 85 percent in the next 60 days. MSGI will then purchase the remaining 15 percent later in 2006, the company said in a statement. MSGI officials declined to release the value of the deal.

MSGI is a systems integrator and software developer that specializes in encryption. The company's software combines digital video with text, biometric and sensor data to create leading-edge mobile communication tools that deliver video and other rich media content to cell phones, PDAs, tablet PCs, and mobile or stationary command centers. The Homeland Security Department is a major customer.

With the acquisition of AONet, MSGI is picking up a secure data center capable of providing safe storage and data back-up. AONet also consults with clients to help improve their current IT security. But the data storage capability is the driver behind the deal, because in an age where cybersecurity has become a necessity, a company can never be too prepared, said MSGI President Joseph Peters.

"Whether [a disaster] was done intentionally, or by accident, it makes sense to have redundancy of that data in a separate facility. AONet does that," Peters said.

MSGI has also teamed with VeriSign Inc., Mountain View, Calif., to run a lawful interception business combining AONet's data warehouse capabilities with VeriSign's NetDiscovery Service infrastructure. Lawful interception, which offers legal access to private communications, is a $1 billion business in Italy, the world's largest market for lawful interception, Peters said. But, the company has plans to reach out beyond Italy, Peters said.

"We see that market not only in Italy, but that could be the gateway to Europe," he said.

MSGI's shares closed on NASDAQ at $4.37 on Wednesday.


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