VeriSign to buy Illuminet for $1.2bn
Internet security and domain registrar VeriSign said Monday it will acquire Illuminet Holdings in a $1.2bn stock swap that will allow VeriSign to court new customers in the telecommunications market.
Illuminet, which is profitable, has 900 customers, including major carriers in the local, wireless and long-distance markets. The company provides carriers with access to the system of signalling networks for US public-switched telecommunications infrastructure.
VeriSign, which offers domain registration, Internet payment and authentication services, said the Illuminet purchase would help it expand into new markets and offer services over communications networks.
Under the agreement, VeriSign will exchange 0.93 shares or options of VeriSign common stock for each outstanding share and option of Illuminet. The deal, which has been approved by both boards of directors, is expected to close in the fourth quarter of 2001 or first quarter of 2002.
With Illuminet, VeriSign said it will be able to offer data-voice products such as WebNum, a navigation service that enables wireless phones to link specific numbers directly to Internet domain names; services using Enum, which combines phone numbers and domain names to create one contact point for businesses and individuals; and a Global Voice Registry service, which enables callers to reach a business simply by speaking the company's name.
For the six months ended 30 June, Illuminet reported a profit of $19m on sales of $91.7m. For that same six months, VeriSign reported a pro forma profit of $101.2m on revenue of $444.6m. VeriSign had a net loss of $11.2b in the second quarter, largely due to a $9.9bn write-off related to the goodwill from last year's acquisition of Network Solutions.
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