VeriSign Buys South Africa’s Thawte for $575 Million

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.

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