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Baltimore Bolsters E-Security Arsenal with Buy

In its most significant play to date, e-security giant Baltimore Technologies scooped up Content Technologies Holdings Limited for $992 million in stock.

Baltimore will dish out 91 million common shares for Content Technologies', whose claim to security fame comes from its MIMEsweeper range of products.

Baltimore's clients should theoretically be able to quash any e-mail borne viruses such as Melissa with the London-based firm's bug-squashing suite, MIMEsweeper, which is used by more than 6,000 business clients and six million users.

Content Technologies' products also enable organizations to implement policies protecting them against confidentiality breaches, exposure to e-mail legal liability and junk e-mail. Baltimore will also help its clients know with whom they are exchanging information, as well as protecting said information.

Just how huge is this for Baltimore? Specifically, Baltimore's will be beef up its presence in North America, where Content Technologies realized some 42 percent of its sales through July 31. This is key in Baltimore's goal to compete with industry leader RSA Security, who until last week had kept a choke-hold on security measures in North America with a 27-year-old encryption algorithm patent.

In general, buying Content Technologies was good because, according to a recent IDC report, the market for content security is set to grow annually by 71 percent and will top $952 million by 2004.

"Just as e-security solutions have enabled and become the 'de facto' standard for secure e-commerce, content-based security is increasingly requested by enterprises as part of their business-critical e-security infrastructure," said Fran Rooney, chief executive officer of Baltimore.

Baltimore's Vice President of Marketing Andrew Morbitzer told InternetNews.com Thursday that his firm, for the first time, has a strong presence in the enterprise security market with the acquisition.

Morbitzer said Content Technologies' 200 employees, in London and Washington, will join Baltimore's ranks, but will remain at their present locations.

"Now is the right time for this expansion," Morbitzer said. "Studies show that content security may grow to be a bigger market than firewall or anti-virus protection. Also, Content Technologies has a shorter cell cycle, which will bring in sales more quickly and, with their technology, we will be able to help clients maintain control of encrypted information across entire corporate networks."

Despite Thursday's huge play of bringing a defensive security heavyweight, he said Baltimore reamins on the offensive and is still hungry for new acquisitions.

On the other side of the fence, Content Technologies CEO David Guyatt said the deal will allow for the expansion and development of his firm's content security offerings. It will also accelerate Content Technologies' e-Sweeper offering into the Application Services Provider (ASP) market by leveraging Baltimore's network of trust e-service providers and commercial certificate authority hosting capabilities.