Looking to cash in on the burgeoning business to business e- commerce market, public key infrastructure and digital certificate company VeriSign Inc yesterday bolstered its portfolio with the acquisition of two companies, Thawte Consulting of South Africa and Signio Inc, for $1.31bn collectively.
VeriSign said it will pay about $735m, based on Friday’s closing stock price, to buy closely-held Signio, a Redwood Shores, California-based provider of payment services to connect online merchants, B2B exchanges, pay processors and financial institutions. As part of the deal, VeriSign will issue about 5.6 million shares of its common stock for all outstanding shares and options of Signio. In the second deal, VeriSign said it has paid $575m in stock for Thawte Consulting, of South Africa, a digital certificate provider with approximately 8% to 10% of the market.
Speaking on a conference call with press and analysts Monday, VeriSign president and CEO Stratton Sclavos said the deal with Thawte helped solidify VeriSign’s leadership position in the digital certificate market. He said Thawte was the second-largest provider of digital certificate technology, next to VeriSign, and that the two companies would work to combine their technologies to create a global standard for the issuance and management of digital certificates for web sites and software developers. He said Thawte brought with it an installed base of thousands of new customers, and added that the company was especially strong in the low-end merchant sector and international markets, where VeriSign hasn’t traditionally played. Together, the companies will have over 3,300 ISPs, ASPs and web hosting companies acting as resellers of their services, the CEO said.
But strategically, the acquisition of Signio is the more significant of the two, enabling VeriSign to broaden its reach even further into the e-commerce marketplace. It dramatically expands our B2B and B2C offerings, said Sclavos It will be the first time we’ve been able to offer an end-to-end model for internet trust services. Sclavos said that in the past, VeriSign could only guarantee the identity of the user, not their ability to pay. That’s where Signio comes in, he said.
Signio has technology which enables a web exchange firm, such as Commerce One or Ariba, or an enterprise to accept payments over the internet. The technology accepts payments from multiple payment types including credit cards, debit cards, automated clearinghouse transactions and internet checks and authorizes them against the standard payment processors such as EDS, FDC, Nova and Paymentech. Where Signio claims its technology differs from its rivals is in the fact it maintains data security during the entire authorization process. Sclavos said that ability, combined with VeriSign’s partnership with Dunn & Bradstreet for access to its business database, enables companies to get a much better handle on who they are doing business with in real time.
VeriSign said it would offer Signio’s services both through its direct and indirect sales channels and will collaborate with the Signio team to further enhance its technology in the areas of payment validation. For example, he said the companies would combine their efforts in the digital receipt arena as well as introducing – some time next year – digital archive and notarization services.
