The acquisition, announced Tuesday, include VeriSign's secure sockets layer (SSL) certificate services, public key infrastructure (PKI) services, and identity protection and authentication service. In addition, Symantec would get a majority stake in VeriSign Japan. The transaction is expected to close in the third quarter.
The deal reflects the ongoing consolidation in the industry. Large security vendors are buying up smaller firms in order to add more features to integrated packages of software and services.
In trying to provide one-stop shopping to customers, Symantec has been on a buying spree. In late April, the company announced that it would buy privately held PGP and GuardianEdge for a total of $370 million in cash. The purchase, set to close this quarter, is expected improve Symantec's position in the data encryption market, which is expected to reach $1.7 billion by 2013, according to IDC.
In buying a chunk of VeriSign, Symantec is hoping to build a more attractive portfolio for organizations that want to offer employees, customers and partners greater access to data and services over the Web. At the same time, the organizations have to deal with a growing variety of mobile devices that are being used to access corporate networks.
"We believe the solution to this dilemma lies in the ubiquity of identity-based security," Enrique Salem, president and chief executive of Symantec, said in a statement. With the combined products and reach from Symantec and VeriSign, we are poised to drive the adoption of identity security as the means to provide simple and secure access to anything from anywhere, to prevent identity fraud and to make online experiences more user-friendly and hassle-free."
Symantec plans to incorporate VeriSign's cloud-based authentication services within Symantec's security software for protecting Web servers from hackers. The acquisition includes VeriSign's "check mark" logo that commerce sites use to instill trust in visitors that their personal information is protected. The trademark is used on more than 90,000 Web sites in 160 countries, according to Symantec.
Symantec claims to have a "footprint" on more than 1 billion computer systems worldwide, including servers and end-user devices, such as laptops, desktops and mobile devices. The company believes the server and user authentication segment of the security market will reach $1.6 billion by 2013.
This month Symantec reported a profitable quarter ended April 30 with a 3% increase in revenue totaling $1.5 billion. Consumer sales were a major contributor, driven by the February release of Norton 360.