24th January, 2009 - VeriSign, Inc. (NASDAQ: VRSN) ("VeriSign") and Certicom Corp. (TSX: CIC) ("Certicom") today announced they have entered into an arrangement agreement whereby VeriSign will acquire all of the outstanding common shares of Certicom for C$2.10 per share. At current exchange rates, the price is equivalent to US$1.67 per share. The aggregate purchase price is approximately C$92 million/US$73 million, or C$50 million/US$40 million, net of Certicom's existing cash and short-term marketable securities.
The agreed transaction price represents a premium of approximately 26% over the closing price of Certicom's common shares on the Toronto Stock Exchange ("TSX") on January 22, 2009. It also represents a premium of approximately 40% over an unsolicited takeover bid for the Common Shares, prior to its termination, by a wholly owned subsidiary of Research in Motion Limited.
With the acquisition of Certicom, VeriSign will gain a leadership position in Elliptic Curve Cryptography (ECC) technology, which is generally recognised as a highly efficient form of public-key encryption. Together, VeriSign and Certicom expect to leverage VeriSign's reach to pursue emerging market opportunities in which ECC can efficiently enable secure data communications.
The transaction will be completed by way of statutory plan of arrangement under the Canada Business Corporations Act. The plan of arrangement is subject to court approval and must be approved by two-thirds of the votes cast by Certicom shareholders at a shareholders' meeting expected to be held in March 2009. The arrangement agreement also contains various termination rights, including that the board of directors of Certicom may under certain circumstances terminate the agreement in favour of an unsolicited superior proposal, consistent with its fiduciary duties, subject to payment of a termination payment of $4 million and subject to a right by VeriSign to match the superior proposal in question.
The Board of Directors of Certicom, after receiving the recommendation of the Special Committee, has unanimously concluded that the VeriSign transaction is in the best interests of shareholders, and unanimously recommends that shareholders of Certicom vote in favour of the transaction at the shareholders' meeting to be held to approve the transaction. The transaction is subject to customary closing conditions and is not subject to any financing conditions. The transaction is expected to close in March 2009. Upon completion of the transaction, Certicom's common shares will be de-listed from the TSX. Full details of the transaction will be available in the information circular that is expected to be mailed to Certicom shareholders in February.
"This transaction combines the strengths of both companies in a unique, strategic fit," said Jim Bidzos, executive chairman and chief executive officer on an interim basis of VeriSign, Inc. "Certicom's leadership in Elliptic Curve Cryptography technology allows VeriSign to develop adjacent market opportunities closely aligned with our core SSL business. We expect our customers and the market will benefit from the combination of Certicom's high quality encryption technology and VeriSign's proven certificate services infrastructure."
"The Special Committee and the Board conducted a thorough process on behalf of Certicom shareholders resulting in a significant increase in value for the Company and its owners," said Jeffrey Chisholm, Chairman of the Board of Directors of Certicom. "We believe this transaction also represents a very promising opportunity for our customers and employees. Joining forces with VeriSign creates wider international opportunities for our employees while customers will benefit from the combination of Certicom's leading cryptography and VeriSign's infrastructure."
Certicom manages and protects the value of content, applications and devices with government approved security. Adopted by the National Security Agency (NSA) for government communications, Elliptic Curve Cryptography (ECC) provides the most security per bit of any known public-key scheme. As the global leader in ECC, Certicom's security offerings are currently licensed to hundreds of multinational technology companies, including IBM, General Dynamics, Motorola, Oracle and Research In Motion. Founded in 1985, Certicom's corporate offices are in Mississauga, Ontario, Canada with worldwide sales and marketing headquarters in Reston, Virginia and offices in Europe and Asia. Visit www.certicom.com