Shareholders bring down axe on Baltimore

Baltimore shareholders have agreed to sell the company's core security business to US-based beTrusted. It means the end of Ireland's dot-com darling, and an end to the hype around public key infrastructures

Baltimore shareholders on Friday voted overwhelmingly to sell the company's PKI business, which owns the UniCert software, to be US-based beTrusted. The sale means that beTrusted, the security services company formed by PricewaterhouseCoopers, will acquiring Baltimore's 300 PKI customers.

Baltimore is now likely to go into voluntary liquidation, said chief executive Bijan Khezri, saying that the vote backed up the board's belief that Baltimore "should not continue operating as a subscale software infrastructure vendor in a consolidating industry."

The board's objective now, said Khezri, is to minimise the company's liabilities. It's a far cry from Baltimore's heyday as Ireland's darling of the dot-com boom, valued at £7bn -- more than the Bank of Ireland's valuation at the time. Baltimore is now left with hardware and software support services, which it has said it plans to dispose of shortly, and an estimated £25m in cash.

"The options available to Baltimore going forward are principally threefold: returning cash to shareholders, a reverse takeover or an acquisition," said Khezri. "In the Board's view, together with its advisors, the return of cash to shareholders can best be achieved by way of voluntary liquidation."

The sale marks the end of Baltimore as a security software company, in which capacity it struggled to sell the complicated and expensive concept of PKI. A public key infrastructure is a framework that provides security services to an organisation using public-key cryptography. These services are managed using certificates that are issued from a central certificate authority. Friday's sale embodies the general failure of PKI technology to match the hype that it generated over the past few years, say analysts.

"The promise of PKI hasn't happened," said Ovum principal analyst Graham Titterington. "And I don't think it will. It is expensive and costly to implement. Businesses have felt it is just not worth the expense. The whole thing turned out to be pie in the sky."

James Governor, principal analyst at RedMonk, said Baltimore's mistake was to bet the house on PKI. "It is also difficult to sell a portfolio that has a lot of different pieces related by a theme, and you're trying to tie them together," said Governor, referring to Baltimore's attempt a year ago to package up its PKI technologies.