VeriSign Buys South Africa's Thawte for $575 Million
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South African Internet certification company Thawte Consulting announced this week that the company has been sold to VeriSign Inc. for R3.5 billion ($575 million) in an all-stock deal.
The Cape Town-based company is the second largest provider of digital certification for the Internet in the world, with VeriSign (VRSN) being at the top of the heap, and the deal will consolidate the US company's hold on the global Internet certification market.
Thawte conducted over 95 percent of its business in over 100 countries across the world and will now cede its client base of between 20,000 to 30,000 customers to VeriSign.
Together the two companies will be formidable as they are the only two digital certificate providers in the world with commercial availability of 128-bit Web site certificates.
The deal is a major coup for Thawte's 26-years-old chief executive Mark Shuttleworth, who established the company only four years ago. It has since grown to become the second largest Net security company, behind VeriSign. Thawte also has established agency networks in 22 countries worldwide.
According to Shuttleworth, concluding this deal was the best move in order to speed up the company's growth process and unlock its true market potential.
"We considered various options," he noted, "but the merger with VeriSign, which is listed on Nasdaq, emerged as the [most efficient] means to unlock our value."
Shuttleworth said he had considered taking his company public through listing on Nasdaq, but had eventually decided on the merger that would enable both companies to diversify their influence across the world.
He revealed that while he would be working with the US company for the next few months to guide the integration effort, he would be leaving the company to pursue new projects after the teething stage.
VeriSign CEO Stratton Sclavos welcomed the deal, saying that it will enable his company to offer unparalleled services to Web sites, developers and other Internet constituencies.
He also revealed a concurrent deal for the purchasing by his company of the US internet payment services systems company, Signio Inc.
This second purchase will cost VeriSign $784 million in stock, bringing its week-long acquisition total to more than $1.3 billion.