Canadian-based Research In Motion will acquire Certicom, an Ontario-based security management company, for approximately C$131 million (US$105.7 million) or C$3.00 (US$2.42) per share.
Last week, BlackBerry maker RIM upped the ante on a C$2.10 per share buyout offer from VeriSign that Certicom announced on Jan. 23. However, the terms of the deal with VeriSign gave Certicom the option of paying C$4 million (US$3.2 million) should it decide to accept any "unsolicited superior proposal." VeriSign notified Certicom earlier this week that it would not top RIM's bid.
On Wednesday, Certicom's board unanimously recommended that shareholders vote in favor of the deal, said Chairman Jeffrey Chisholm. Completion of the buyout agreement is expected next month, subject to the deal's acceptance by two-thirds of Certicom's shareholders and court approval.
The relationship between the two firms stretches back to a strategic alliance in July 2000. That agreement enabled RIM to deploy a range of Certicom security products on its handsets and infrastructure, including WTLS Plus, SSL Plus, and the Security Builder cryptographic toolkit.
The deal gives RIM access to coveted elliptic curve cryptography (ECC) technology, which Certicom says provides "the most security per bit of any known public-key scheme."
The agreement also includes Certicom's MobileTrust digital certificates, which enable both parties in an e-commerce transaction to identify one another. The technology is currently licensed to hundreds of multinational companies, including General Dynamics, IBM, Motorola and Oracle. Moreover, Certicom said the U.S. National Security Agency has adopted ECC for securing government communications.
RIM's relationship with Certicom soured late last year when it attempted a hostile takeover at C$1.50 (US$1.21) per share. The BlackBerry maker withdrew on Jan. 20, after the Ontario Superior Court of Justice issued a permanent restraining over blocking RIM's takeover bid. However, RIM's latest bid was enough to seal the deal.
BlackBerry Subscriber Growth
Research In Motion said Wednesday it underestimated the number of net handset subscriber additions it would achieve in its fourth quarter, which ends Feb. 28. The BlackBerry maker predicted the final number will be more than 20 percent higher than the 2.9 million additions it forecast in mid-December.
"A variety of factors -- including product mix, lowered channel inventory levels, and an increased ratio of new subscriber sales to upgrade and replacement sales -- are contributing to the degree of out-performance in subscriber growth relative to revenue and earnings performance within the quarter," the company said.
RIM said it had record subscriber levels throughout December and continued to see strong net subscriber additions even after the holiday season was over. "RIM achieved a very strong start to the holiday buying season, and the momentum carried on stronger than expected during the past seven weeks despite a seasonally slower time frame and the challenging economic environment," said co-CEO Jim Balsillie.
RIM also reaffirmed the company's financial guidance for its fourth quarter. The BlackBerry maker expects revenue to fall to between $3.30 billion to $3.50 billion. Earnings per share are expected to come at the low end of RIM's prior guidance of 83 cents to 91 cents per share.