Aladdin Knowledge Systems to acquire Eutronsec SpA

Mumbai

July 7, 2008

Aladdin Knowledge Systems announced it signed a definitive agreement to
acquire Eutronsec, SpA, a provider of software protection and authentication
products, for approximately €10.0 million in cash, including acquisition
related expenses.

“The acquisition of Eutronsec is focused on further expanding Aladdin's
marketshare and presence in the European region and extending our global
position as an industry leader in the areas of software protection and
authentication,” said Yanki Margalit, CEO, Aladdin Knowledge Systems. “Eutronsec's
innovative products are designed to guard against software piracy as well as
protect electronic intellectual property and are a complement to Aladdin's
award-winning portfolio of IT security products. We look forward to providing
Eutronsec's customers throughout Europe with the high-quality service and
support they have come to expect with the added benefit of our worldwide
security expertise, research and development resources as well as the strong
financial backing of a publicly-traded company.”

Eutronsec is a significant player in the Italian software security and
authentication market, with full year 2007 annual revenue relevant to Aladdin's
primary business just under €5 million. The closing of the transaction is
subject to customary closing conditions and is expected to be consummated by
September 2008. Pending a successful completion of the transaction, the
acquisition is anticipated to be accretive to Aladdin on a diluted earnings per
share basis during the first half of 2009.