As expected, Symantec Corp. (NASDAQ: SYMC) today announced that it has signed a definitive agreement to acquire VeriSign’s (NASDAQ: VRSN) identity and authentication business for approximately $1.28 billion in cash.
VeriSign’s identity and authentication business includes its Secure Sockets Layer (SSL) Certificate Services, Public Key Infrastructure (PKI) Services, VeriSign Trust Services and VeriSign Identity Protection (VIP) Authentication Service.
Also in the terms of the agreement, Symantec will purchase a majority stake in VeriSign Japan. Symantec expects the transaction to be 9 cents dilutive to non-GAAP earnings per share in fiscal year 2011, due to the purchase price accounting write down of deferred revenue, and accretive to non-GAAP earnings per share in the September 2011 quarter. The agreement is subject to customary closing conditions, including regulatory approvals, and is expected to close in the September quarter.
The acquisition adds to Symantec’s recent acquisitions of PGP Corporation and GuardianEdge in which it shelled out a combined $370 million in cash for the two encryption businesses.
VeriSign helps organizations validate the identity of users through its VeriSign Identity Protection (VIP) user authentication service that complements the existing Identity Safe capabilities within the Norton products. The cloud-based VIP service helps organizations doing business online confirm the identities of their customers, employees and partners through user-owned digital certificates that reside on a card, token or other device such as a mobile phone, ensuring that they are giving only legitimate users access to their information. VeriSign has already issued more than two million VIP credentials to individuals and has a network of hundreds of merchants.
Shares of VeriSign (NASDAQ: VRSN) closed at $27.99 per share, down 0.85 percent. Shares of Symantec (NASDAQ: SYMC) fell 2.01 percent to $15.63 in trading Wednesday.
Information on how Symantec will integrate VeriSign’s services:
Symantec will host a conference call and webcast today to discuss the acquisition at 2:30 p.m. PDT/ 5:30 p.m. EDT. The live discussion can be accessed by dialing 888-208-1332 domestic and 913-312-0687 internationally, passcode 8974237. The audio webcast and slide presentation providing an overview of the transaction and strategic rationale and will be available at: