VeriSign, Inc. will acquire its leading competitor in the market for SSL certificates, GeoTrust Inc., for $125 million in cash, the two companies said today. The deal will solidify VeriSign's dominant position in the market for SSL certificates, which are used to secure web sites for Internet e-commerce. The acquisition is subject to regulatory approvals, and is expected to close in the second half of this year, the companies said.
VeriSign certificates secure approximately 45 percent of the SSL-enabled sites on the Internet, while GeoTrust certificates are found on 27 percent, according to Netcraft's SSL Survey, which provides detailed analysis of trends in the SSL market. The companies have both announced their support for a new tier of high-security SSL certificates for e-commerce sites, expected to be introduced later this year.
This is the second time VeriSign has acquired its primary competitor in the SSL certificate market. In December 1999 VeriSign paid $575 million to buy Thawte, a South African company that gained popularity by selling certificates at lower prices. At the time the deal was announced, Thawte had a 38.5 percent share of all SSL-enabled sites, to 49 percent for VeriSign - meaning the deal gave VeriSign nearly 88 percent market share.
GeoTrust has been the strongest performer in the SSL market over the past several years, supported by a network of more than 9,000 resellers in 140 countries, including many of the world's major web hosting companies. That reseller channel will complement VeriSign's direct-sales SSL business, currently serving more than 3,000 enterprises worldwide.
"The acquisition of GeoTrust improves VeriSign's ability to serve the reseller channel market with technologies and services that are specifically tailored to their needs," said Judy Lin, executive vice president and general manager, VeriSign Security Services. "The successful channel business GeoTrust has built will benefit from our infrastructure and additional products."
"As the market for SSL continues to grow among organizations of all sizes, VeriSign recognizes the importance of a strong reseller channel to reach a broader range of customers," said Neal Creighton, GeoTrust CEO. "GeoTrust customers and resellers are sure to benefit from VeriSign's heritage in providing SSL and other network security solutions, as well as its global support network."
The GeoTrust purchase has benefits for VeriSign beyond the e-commerce market. GeoTrust also has partnered with Adobe Systems to develop certificates to secure and authenticate PDF documents.