Zergo Holdings Plc, the UK-based cryptographic software company, is to acquire Irish security software supplier Baltimore Technologies Ltd in a deal worth around $55m. Dublin, Ireland- based Baltimore, a rare company with both Java and cryptography experience, is one of the international e-commerce start-ups which has been able to exploit US export restrictions on strong encryption by writing and selling its 128-bit algorithms outside the US. As new laws ease those export restrictions, that window of opportunity will close. Back in March, Zergo acquired Australian cryptography company, Security Domain Ltd for 6m pounds, and promised further acquisitions at the time. That company brought with it a San Mateo, California subsidiary, which was intended to form the basis for Zergo’s entrance into the US market. Baltimore already has US offices in Boston, Massachusetts and in San Mateo. The combination will result in a firm of some 350 employees with annual revenues of around $30m. Henry Beker, current chairman and CEO of Zergo, takes on the same position at the combined company, with Fran Rooney, current president and CEO of Baltimore becoming chief operating officer. Zergo’s product lines and security consulting and system integration businesses will be combined with Baltimore’s public key and cryptographic technology and sales and marketing channels, and will be aimed at e-commerce users. Zergo will issue approximately 9 million shares and $5m in convertible loan notes in exchange for 100% of the shares in Baltimore.
