UPDATE 1-Vector-led group buying SafeNet for $634 mln

(Adds shares, background)

NEW YORK, March 5 (Reuters) - Information security company SafeNet, Inc. SFNT.O said on Monday it agreed to be bought by an investor group led by Vector Capital for $28.75 per share, in a deal worth about $634 million.

The offer price represents a 12 percent premium over SafeNet's average closing share price in the last month, the company said, and a 57 percent premium over its share price on Oct. 2, the day before it announced that it would explore strategic alternatives.

SafeNet's shares were unchanged at $28.30 in late afternoon Nasdaq trading on Monday.

SafeNet's Chairman and Chief Executive Officer Walter Straub said in a statement that the deal followed a five-month review of strategic options which drew "significant competitive interest" in the company.

The deal is expected to be completed during the second quarter of 2007, SafeNet said.

Vector Capital is a buyout firm specializing in technology.

((Reporting by Michael Flaherty and Megan Davies, editing by Tim Dobbyn; email michael.flaherty@reuters.com; +1 646-223-6152)) Keywords: SAFENET TAKEOVER/

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