VeriSign Acquiring Certicom After RIM Bails - InformationWeek

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VeriSign Acquiring Certicom After RIM Bails

All three parties will be forced to engage in some fence mending because RIM's and Certicom's products are intertwined.

Certicom's strategy of holding out for a high bid to be taken over apparently has succeeded as VeriSign announced Friday that it would take over the smaller company.

Earlier in the week, Certicom was successful in beating off a takeover bid from Research In Motion.

VeriSign will pay a price equivalent to $72 million (92 million Canadian dollars). RIM's $52 million offer was considerably lower, and Certicom succeeded in blocking the RIM offer and placing itself "in play" with the hope that another company would appear with a higher offer.

All three parties will be forced to engage in some fence mending because RIM's and Certicom's products are intertwined and Certicom's elliptic curve cryptography is a security workhorse in the high-tech industry. RIM has utilized Certicom's ECC in its BlackBerry handsets for years. In an effort to attract additional takeover offers, Certicom had established a "data room" of its confidential records so potential suitors could examine its books and bid with an understanding of Certicom's business.

"This transaction combines the strengths of both companies in a unique strategic fit," VeriSign's Jim Bidzos said in a statement. "Certicom's leadership in elliptic curve cryptography technology allows VeriSign to develop adjacent market opportunities closely aligned with our core SSL business."

Bidzos, who is serving as VeriSign's executive chairman and CEO on an interim basis, said the marketplace will benefit from a combination of VeriSign's certificate services infrastructure and from Certicom's encryption technology. Certicom's ECC has been adopted for government communications by the U.S. National Security Agency.

After Certicom broke off negotiations with RIM this week, TD Securities was hired by Certicom to oversee new takeover negotiations.

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