UK storage encryption company Stonewood is being acquired by US satellite communications company ViaSat Inc. for ‘approximately’ $20 million (£13.8 million).

Dorset-based Stonewood’s market is in high-end encrypted hard drives for use by public sector organisations, including the military, with central management and compliance to security standards such as FIPS-140 2 high on the features list.

The two current product lines are the internal Flagstone and external Eclypt Freedom encrypted hard drives, which include tamper-proofing as an extra layer of security. The latter was launched in April 2008.

ViaSat supplies military-grade secure satellite systems for the US military and could be buying Stonewood to give the sales pitch an extra boost with data at rest products. It is also a way for Stonewood products to gain traction in the US which has a policy of using US-based suppliers for encryption systems, although a source told Techworld that Stonewood had sold its hardware to NATO.

“Joining forces with ViaSat will enable us to provide a comprehensive portfolio of information assurance products across multiple security environments, and the combination presents a strategic opportunity for expansion into US markets as Stonewood products are certified, cross-marketed, and distributed over broader customer bases,” said Stonewood CEO, Chris McIntosh

 The stock and cash deal will see privately-held Stonewood taken over by July. Viasat has yet to issue any guidance on the effect the acquisition will have on its earnings.