RIM Aims to Boost Security Technology

Research in Motion is making a $66 million dollar hostile bid to acquire security cryptography company Certicom Corp.

The BlackBerry maker, which said it initiated talks in February 2007, is offering $1.50 per share in cash, representing a 76.5 percent premium over Certicom’s closing price on Dec. 2. It plans to present a formal offer to shareholders by December 12.

“We believe our proposed offer is fair, reflects the full value of Certicom and takes into account the growth prospects and potential synergies made possible by this transaction,” Jim Balsillie, Co-CEO of RIM (NASDAQ: RIMM), stated in a release earlier this week.

“As we are unable to engage Certicom management in a meaningful dialogue to advance the terms of a potential transaction, we believe it is in the best interests of our respective shareholders, employees and customers to make this attractive offer directly to Certicom shareholders now,” said Balsillie.

Certicom provides Elliptic Curve Cryptography (ECC), a public key cryptosystem that has been adopted by the National Security Agency for government communications and provides the most security per bit of any known public key scheme. Certicom currently licenses its solution to more than 300 customers, including RIM, General Dynamics, Motorola, Oracle and Unisys.

The acquisition comes as RIM pushes forward into more government-based enterprises both in the U.S. and abroad. It could go a long way to meeting specific security needs in countries such as India. RIM would not provide any further detail beyond its released statement. Certicom did not return press calls by deadline.

The Indian government is concerned that e-mails sent through BlackBerry devices can not be traced or intercepted due to current security technology now used by RIM. RIM has been negotiating with Indian leaders on potential approaches to meet their concerns.

“This is a great move [for RIM] as there is a lot of untapped governments, outside of the U.S., that are demanding higher security barriers for RIM to be a preferred system,” IDC senior analyst Ryan Reith told InternetNews.com.

While already revered as a very secure mobile platform, Reith said handset makers still need to build in better and stronger security as threats are constantly changing.

Earlier this year RIM and security partner RSA, a division of storage titan EMC (NYSE: EMC), debuted a two-factor authentication tool for the BlackBerry.

“They need to continue to focus on improving security as time moves on, and what better a move than trying to partner with a team that is known as an effective player in that space,” said Reith.

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