Salt Lake City’s Digital Signature Trust Co has acquired TradeWave Corp, a subsidiary of Cyberguard Corp, and says it will use the acquisition to enter the electric utility industry and the Japanese marketplace. Both companies provide digital certificate-backed e-commerce security and repository services technology. DST said it would partner with Nippon System Development Co Ltd to distribute TradeVPI in Japan, which signed an exclusive three year deal with TradeWave last year. Terms of the deal were not disclosed.
Cyberguard acquired TradeWave at the end of 1997 from SunRiver Corp for just $350,000 (CI No 3,138). Originally founded in 1991 as EINet Corp, it was snapped up by SunRiver in 1995. But the unit lost $2.5m in the first nine months of 1997 and continuing to spend at a rate of $1m a month just before SunRiver (now Boundless Technologies Inc) lost patience.
TradeWave’s main value is that its technology is used widely for OASIS, the Open Access Same-time Information System, the national electricity trading system which underpins the Federal Energy Regulatory Commission’s efforts to deregulate the US electricity utility industry. TradeView’s TradeVPI is used by almost half of the 400 or so OASIS member utilities, and is involved in nearly 75% of the power traded via the network. DST, a subsidiary of Utah’s Zions First National Bank, provides certification services to the financial services industry through the American Bankers Association’s ABAecom network, to the automotive industry through the Automotive Network Exchange (said to be the world’s largest virtual private network) and to multiple industries through the Entrust Worldwide secure network.
CyberGuard is facing its own difficulties, having been delisted from the Nasdaq exchange on January 12. In March it hired a new president and CEO, David Proctor, along with other top management, and announced plans to reorganize its marketing, sales and support operations worldwide. The company reported a net loss of $15.5m on revenues of $14.2m for its year ending June 1998, having restated the results due to a review of its revenue recognition policy. Cyberguard sold off the Galaxy search engine it acquired as part of the TradeWave deal last September to the America Health Network (CI No 3,495), and the following month sold off its Arca Systems professional services business to Exodus Communications Inc (CI No 3,510). The company – originally formed from the Trusted Systems division of Harris Computer Systems Corp – is now concentrating on its core firewall business.
