BlackBerry Maker Acquires Certicom For $106 Million - InformationWeek
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2/11/2009
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BlackBerry Maker Acquires Certicom For $106 Million

Certicom's cryptography software has been adopted by the U.S. National Security Agency for government communications.

Certicom's holdout for better terms from Research In Motion's initial $53 million hostile acquisition bid has paid off. The maker of BlackBerry devices on Tuesday agreed to pay $106.5 million for Certicom, more than double its original offer made in December.

The acquisition, announced by Certicom, was preceded by an announcement from VeriSign, which said that it would not match the Research In Motion offer.

In a statement, Certicom executives said it "will be in a position to enter into an arrangement agreement with RIM as contemplated by the RIM offer after Certicom has made payment of a $4 million (in Canadian dollars) termination fee to VeriSign and terminated the VeriSign agreement."

Cryptography specialist Certicom provides its Elliptic Curve Cryptography (ECC), which it maintains delivers the most security per bit "of any known public-key scheme." Its security solutions have been adopted by the U.S. National Security Agency for government communications.

The Certicom acquisition process covered several weeks after it was reported that RIM licenses Certicom technology and acquisition talks between the two Canada-based firms began a year ago. Certicom technology already is utilized throughout RIM's BlackBerry security operations.

After RIM's initial bid, which Certicom maintained was too low, the cryptology company set up a "data room" of its confidential records and invited potential alternate suitors to examine its books and bid against RIM. VeriSign entered the bidding, but dropped out earlier this week when it declined to match RIM's bid.

Jeffrey Chisholm, Certicom's chairman, said the company's board believes "the process we undertook has delivered the optimal value to our shareholders."

In a separate announcement, RIM told investors Wednesday that it expects net subscriber account additions to be 20% higher than the 2.9 million subscribers it forecast last month. But despite the rise in BlackBerry users, RIM warned its quarterly earnings and gross margin would come in at the low end of expectations when it reports earnings on April 2.

As mobile devices become more prevalent and deeply ingrained in employees' work lives, the question of how to deploy, secure, and manage them has become an increasingly pressing problem for enterprise IT departments. InformationWeek has published an independent analysis of this topic. Download the report here (registration required).

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