The transaction allows VeriSign to focus on the growing Internet infrastructure services business, where it expects to build on its expertise and record as the longtime operator of the .com and .net domain infrastructures.
VeriSign, Inc. today announced a definitive agreement to sell its Authentication Services business to Symantec Corp. for approximately $1.28 billion in cash. This business, which includes the industry-leading Secure Sockets Layer (SSL) encryption certification services, the managed Public Key Infrastructure (PKI) platform, and the company's ownership stake in VeriSign Japan, contributed approximately $101.9 million or 39 percent of VeriSign's revenues in the quarter ended March 31, 2010.
"This transaction allows VeriSign to focus on the growing Internet infrastructure services business, where we expect to build on our expertise and record of success as the longtime operator of the .com and .net domain infrastructures. Following the close of this transaction, VeriSign will have a strong balance sheet, growth opportunities and a continuing commitment to deliver value to our customers and shareholders," said Mark McLaughlin, VeriSign president and CEO. "The market for security and authentication services is rapidly changing in favor of large distribution channels, extensive product sets and integrated service delivery. We believe Symantec's leading position as the premier end-to-end security provider will enable them to better serve our authentication customers and accelerate market growth."
"For 15 years, VeriSign has pioneered the SSL and related authentication services business," said Jim Bidzos, VeriSign founder and executive chairman. "Today, Symantec is the best company to drive this business forward, and we believe this transaction will benefit our employees, customers and shareholders."
Transaction Details
The agreement provides that Symantec will acquire the assets of VeriSign's Authentication Services business, including its ownership stake in VeriSign Japan as well as certain brands and trademarks such as VeriSign's check mark.
Symantec has indicated that it expects to offer positions to most of VeriSign's authentication employees to support the business. VeriSign has agreed to support the business after the transaction's close by providing transitional services to Symantec. Following the close of the transaction, VeriSign expects to eliminate some positions that will not move to Symantec and that will not be required for its future operations.
The boards of both VeriSign and Symantec have unanimously approved this transaction, which is not subject to financing contingencies or shareholder approval. The transaction is expected to close in 60 to 90 days or upon receipt of regulatory approval.
Business Focus Post-Closing
Following the close of this transaction, VeriSign's remaining business will consist of its Naming Services business, which contributed approximately $162 million or 61 percent of the company's revenues in the quarter ended March 31, 2010.
"We will continue to focus on the growth strategies we've previously articulated for our domain name and infrastructure availability businesses," said McLaughlin. "These include leveraging our existing infrastructure capabilities for new services, expanding internationally and pursuing new top-level domain opportunities."
J.P. Morgan Securities Inc. acted as VeriSign's financial advisor and Cleary Gottlieb Steen & Hamilton LLP acted as VeriSign's legal advisor on the transaction.
Symantic Statement
In a separate statement, Symantec (NASDAQ: SYMC) issued its own announcement about the sale. The company said it was announcing that it has signed a definitive agreement to acquire VeriSign's (NASDAQ: VRSN) identity and authentication business, which includes the Secure Sockets Layer (SSL) Certificate Services, the Public Key Infrastructure (PKI) Services, the VeriSign Trust Services and the VeriSign Identity Protection (VIP) Authentication Service. The combination of VeriSign's security products, services and recognition as the most trusted brand online and Symantec's leading security solutions and widespread distribution will enable Symantec to deliver on its vision of a world where people have simple and secure access to their information from anywhere.
"With the anonymity of the Internet and the evolving threat landscape, people and organizations are struggling to maintain confidence in the security of their interactions, information and identities online. At the same time, people's personal and professional lives have converged and they want to use their various digital devices to access information wherever they are without jeopardizing their privacy," said Enrique Salem, president and CEO, Symantec. "IT is faced with the challenge of giving users the appropriate access, while ensuring that corporate data is not at risk. We believe the solution to this dilemma lies in the ubiquity of identity-based security. With the combined products and reach from Symantec and VeriSign, we are poised to drive the adoption of identity security as the means to provide simple and secure access to anything from anywhere, to prevent identity fraud and to make online experiences more user-friendly and hassle-free."
Under the terms of the agreement, Symantec will purchase the specific assets from VeriSign, including the majority stake in VeriSign Japan, for a purchase price of approximately $1.28 billion in cash. Symantec expects the transaction to be 9 cents dilutive to non-GAAP earnings per share in fiscal year 2011, due to the purchase price accounting write down of deferred revenue, and accretive to non-GAAP earnings per share in the September 2011 quarter. The agreement is subject to customary closing conditions, including regulatory approvals, and is expected to close in the September quarter.
Enabling a New Vision of ComputingThrough this acquisition, Symantec can help businesses incorporate identity security into a comprehensive framework so that IT can confidently and securely adopt new computing models, from cloud computing to social networking and mobile computing to user-owned devices, that promise operational efficiencies and freedom of choice for their employees and customers. That framework is based on five imperatives that Symantec is enabling as part of its new vision of computing and includes:
- Identity security: proving that people and sites are who they say they are
- Mobile and other device security: securing mobile and other devices and the information on them
- Information protection: protecting information from loss, attack, theft and misuse and ensuring the ability to recover that information
- Context and relevance: delivering information that is relevant to people in both their personal and professional roles
- Cloud security: ensuring the secure delivery of applications and information from both public and private clouds
Ease-of-use, speed-of-delivery and user-driven preferences are the new imperatives in today's workplace. People whose personal and professional lives have converged onto their digital devices increasingly expect the freedom to work from anywhere using their own devices, to use any application and to collaborate with anybody in their social network to effectively get their jobs done and simultaneously live their network-enriched lives.
IT departments struggle to meet user expectations with simple, secure and cost-effective solutions. Cloud computing can provide instantaneous scale and delivery of applications and desktops by enabling businesses to leverage services from the cloud instead of deploying applications on premise. Identity-based security gives IT the assurance that as information moves in and out of the cloud it is always protected--across any device and between the network and devices they control and those that they don't. The user's identity drives what information they can access and how it can be used and shared, independent of the device or application.
Creating Mutually Trusted Interactions OnlineVeriSign's SSL Certificate Services provide users with assurance that the websites they are interacting with are legitimate and secure and that their information will be safe when they share it with that site. The VeriSign check mark signifies the authenticity of the websites that users visit and assures them that any sensitive information they share with that site will be encrypted during online transactions. With more than one million web servers using VeriSign SSL certificates, and an infrastructure that processes more than two billion certificate checks daily, VeriSign has the leading share of the SSL market. The addressable market for the server and user authentication segment is estimated to reach $1.6 billion by 2013.
Symantec's current portfolio and along with assets from VeriSign provide the depth and breadth of technologies to make identity-based security of information more universal and part of a comprehensive security solution. By combining VeriSign's SSL Certificate Services with Symantec Critical System Protection or Protection Suite for Servers, Symantec will help organizations ensure a higher level of security on their web servers as well as verify that security, providing users with the trust and confidence necessary to do business online.
VeriSign helps organizations validate the identity of users through its VeriSign Identity Protection (VIP) user authentication service that complements the existing Identity Safe capabilities within the Norton products. The cloud-based VIP service helps organizations doing business online confirm the identities of their customers, employees and partners through user-owned digital certificates that reside on a card, token or other device such as a mobile phone, ensuring that they are giving only legitimate users access to their information. VeriSign has already issued more than two million VIP credentials to individuals and has a network of hundreds of merchants.
Through Symantec's worldwide distribution network and footprint on more than one billion systems -- including end-user devices such as laptops, desktops and smart devices, as well as servers -- Symantec can facilitate the ubiquity of identity security through digital certificates for both individuals and companies. This is critical to creating mutually trusted interactions online. Merchants have added incentive to join the VIP network if user certificates are widely distributed. More merchants in the VIP network means a more secure and convenient experience for customers moving among member sites. Merchants benefit as well from knowing their customers are also trusted and secure.
Symantec can expand the VIP ecosystem by incorporating user certificates into its Norton-branded consumer products providing a channel through which consumers can easily create secure identities that can be authenticated when they do business online. In addition, the combination of the information classification capabilities of Symantec's Data Loss Prevention solutions and Data Insight technology along with VeriSign's identity security services, will allow Symantec to help customers ensure that only authorized users have access to specific information.
Signifying Trust OnlineThe VeriSign check mark is the most recognized symbol of trust online with more than 175 million impressions every day on more than 90,000 websites in 160 countries. Symantec's security solutions and the company's Norton-branded suites protect more than one billion systems and users around the world. With the addition of VeriSign's security assets, Symantec will become the leading source of trust online. Following the close of the transaction, Symantec plans to incorporate the VeriSign check mark into a new Symantec logo to convey to users that it is safe to communicate, transact commerce and exchange information online.
For more information on how VeriSign's services will augment Symantec's portfolio please visit: http://go.symantec.com/verisign.
About VeriSign
VeriSign, Inc. (
About Symantec
Symantec is a global leader in providing security, storage and systems management solutions to help consumers and organizations secure and manage their information-driven world. Our software and services protect against more risks at more points, more completely and efficiently, enabling confidence wherever information is used or stored. More information is available at www.symantec.com.
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