Verisign spends $1.2 billion to buy two companies

Digital certificate vendor VeriSign today announced two acquisitions in stock deals valued at more than $1.2 billion.

The company said it would acquire Signio, a provider of payment services connecting online merchants, and electronic payments company, Thawte Consulting of South Africa.

Verisign said it will buy Signio for stock valued at $733.3 million and Thawte Consulting for stock valued at $575 million. The company said it is looking to broaden its product line by providing payment services to online retailers, stockbrokers and other merchants.

"They are expanding the scope of their business beyond the historic focus on identification to include payments," said David Breiner, an analyst with Prudential Volpe.

Stratton Sclavos, president and chief executive of Verisign, said that as a combined entity, Verisign and Thawte would implement a set of global standards for digital certificates for websites and software developers.

He also said the Signio deal, which is expected to be completed by the end of the first quarter, will take the digital-certificate vendor into the business of payment processing.

"Establishing a consistent, globally-interoperable trust infrastructure for the Internet has been our mission since day one," Scalvos said.

He added that the combination of Verisign's and Thawte's customer bases and widely deployed digital certificate root keys will make it possible to provide services across the Internet. Together, Thawte and Signio have more than 3,300 ISPs, ASPs and Web hosting companies acting as resellers of their services.

The Silicon Valley based Verisign currently leases and manages software for issuing electronic IDs known as digital certificates. Internet retailers and others license the software to secure orders and credit card information sent over the Internet.

Both Thawte and Signio have about $1 million in annual sales and they have a combined workforce of about 130. The company told analysts the acquisitions should boost revenue by 10 per cent to 15 per cent next year.