Acquisition reinforces
strategy to extend digital trust services beyond the Internet to telephony
and other network systems
Mountain View, CA, September 24, 2001 - VeriSign, Inc. (Nasdaq:VRSN),
the leading provider of digital trust services, today announced a definitive
agreement to acquire publicly traded Illuminet Holdings, Inc. (Nasdaq:
ILUM) of Olympia, Washington. Illuminet is a leading provider of intelligent
network and signaling services to communications carriers.
Illuminet's business will expand the breadth of
VeriSign's digital trust services portfolio, which includes Web identity,
authentication and payment services. These services are supported by
an infrastructure relied upon to conduct over 5 billion domain name
system (DNS) look-ups, 100 million database queries, and millions of
secure commerce and communications transactions every day.
"Through this combination, service providers
and enterprises will have the opportunity to use VeriSign's highly scalable
data and voice infrastructure to deliver new services and to improve
the speed and efficiency of their current offerings," said Stratton
Sclavos, president and CEO of VeriSign. "Just as we created a trusted
digital environment with our Internet-based services, this new integrated
data-voice infrastructure will serve as the foundation for new types
of services for the highly anticipated next-generation networks."
"Our customers benefit from the marriage of
the Internet infrastructure and communications network because it opens
up the opportunities for new data and voice services," said Roger
H. Moore, CEO of Illuminet Holdings. "The combination of VeriSign
and Illuminet will accelerate the delivery of services that can generate
new revenue."
VeriSign will utilize its global infrastructure
to accelerate the introduction of new services for Illuminet's customers,
such as secure short messaging, local number portability and Voice Over
IP bridging. Illuminet will also enable VeriSign to deliver data-voice
offerings such as WebNum™, a navigation service that enables wireless
phones to link specific numbers directly to Internet domain names; services
using ENUM, which combines phone numbers and domain names to create
one contact point for businesses and individuals; and a Global Voice
Registry service, which enables callers to reach a business simply by
speaking the company's name.
Under the terms of the agreement, VeriSign will
exchange 0.93 shares or options of VeriSign common stock for each outstanding
share and option of Illuminet. VeriSign will issue approximately 30.4
million shares for all issued and outstanding shares of Illuminet and
will assume Illuminet's outstanding employee stock options. Based on
VeriSign's closing stock price of $38.30 per share on September 21,
2001, this exchange ratio values the transaction at approximately $1.2
billion. This acquisition will be accounted for as a purchase transaction
and is expected to be completed late in the fourth quarter of 2001 or
early in the first quarter of 2002. The acquisition has been approved
by the board of directors of each company and is subject to various
closing conditions, including government approvals and consent by the
stockholders of Illuminet.
With more than 900 customers, including major carriers
in the long distance, local and wireless markets, Illuminet provides
carriers access to the system of signaling networks for nearly the entire
U.S. public-switched telecommunications infrastructure.
Through its comprehensive SS7 network, Illuminet
delivers a full range of connectivity, signaling and database services
that include seamless roaming for wireless carriers, intelligent network
services, Operations Support Interconnection Services, SS7 network usage
measurement and real-time account management for pre-paid wireless users.
Illuminet supports telecommunications networks used to make wireless
calls, long-distance calls and Internet connections by ensuring that
carriers can connect to each other and also enabling advanced calling
features such as caller identification and local number portability.
In the second quarter of 2001, Illuminet reported
revenues of $47.2 million. It has approximately 500 employees. It is
based in Olympia, Washington and also has a significant presence in
Overland Park, Kansas and in Dallas, Texas. Operations will continue
in those areas. Additional information on Illuminet is available at www.illuminet.com.
Conference Call
VeriSign will host a conference call at 5:30am (Pacific)
on Monday, September 24th to discuss the announcement. A listen-only
live broadcast of the conference call will be available at www.verisign.com.
A replay of the teleconference will also be available at (888) 203-1112
(passcode: 733616) beginning at 8:30am (Pacific) on September 24th and
running through October 1st.
About VeriSign
VeriSign, Inc. (Nasdaq:VRSN) is the worldwide leader in providing digital
trust services that enable everyone, everywhere to use all networks
with confidence. Digital trust services create a trusted environment
through three core offerings - Web identity, authentication and payment
services - powered by an infrastructure that manages billions of network
transactions daily. Additional news and information about the company
is available at www.verisign.com.
Statements in this announcement other than
historical data and information constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements
involve risks and uncertainties that could cause VeriSign's actual results
to differ materially from those stated or implied by such forward-looking
statements. The following potential risks and uncertainties, among others,
could cause actual results to differ materially from those described
in the forward-looking statements: failure of the transaction to close
due to the failure to obtain regulatory or other approvals; failure
of the Illuminet stockholders to approve the merger; the risk that the
businesses will not be integrated successfully and unanticipated costs
of such integration; failure of the combined company to retain and hire
key executives, technical personnel and other employees; failure of
the combined company to manage its growth and the difficulty of successfully
managing a larger, more geographically dispersed organization; failure
of the combined company to successfully manage relationships with customers,
suppliers and strategic customers; network outages, network capacity
constraints or security breaches; failure of the combined company's
customers to accept new services or to continue using the products and
services of the combined company; and competition in the various markets
serviced by the combined company.
More information about potential factors
that could affect VeriSign's business and financial results is included
in VeriSign's filings with the Securities and Exchange Commission, especially
in the company's Annual Report on Form 10-K for the year ended December
31, 2000 and Forms 10-Q for the quarters ended March 31 and June 30,
2001. VeriSign undertakes no obligation to update any of the forward-looking
statements made the date of this press release.
VeriSign Contacts:
Media: Tom Galvin, tgalvin@verisign.com,
650-426-5526
Investor Relations: Katie Ochsner, kochsner@verisign.com,
650-426-3512
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