Magazine article American Banker

Entrust to Buy enCommerce in $586 Million Stock Deal

Magazine article American Banker

Entrust to Buy enCommerce in $586 Million Stock Deal

Article excerpt

The digital certificate provider Entrust Technologies Inc. announced a deal Tuesday to solidify its position as a leader in the market, saying it would buy the security software vendor enCommerce Inc. for $586 million of stock.

Acquiring enCommerce would let Plano, Tex.-based Entrust build on its current capabilities by giving corporations the ability to authorize users to gain access to particular information or accounts online.

Entrust and enCommerce have a number of customers in common, including J.P. Morgan. The New York investment bank and others encouraged the merger, they said.

"The two solutions complement each other," said Alberto Yepez, chief executive officer and chairman of Santa Clara, Calif.-based enCommerce. "Entrust's certificates identify the user. Our technology personalizes access and manages the authorization and access rights of users."

Mr. Yepez would join the Entrust board under the deal, which is expected to close in the third quarter. His title with the combined company is to be announced in May.

Entrust's growth strategy differs from that of Verisign Inc., one of its chief competitors. Verisign last month announced an agreement to buy Network Solutions Inc. for $21 billion in stock. By acquiring the single source for domain names on the Internet, Verisign is attempting to unify the administrative procedures of registering domain names and getting digital certificates.

Entrust, meanwhile, is pursuing "a fairly open opportunity" that is "in our hand already," said John Ryan, president and chief executive officer of Entrust, who would be president and CEO of the combined organization. Only 10% of Entrust's customers have chosen a provider of authorization software, he said.

"We're creating a new category when you add our two products," Mr. Ryan said of the enCommerce deal. In addition to "knowing who you're dealing with, you know what they're allowed to do. …

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