VeriSign to acquire Illuminet in $1.2 billion deal

Internet domain registry and security specialist VeriSign Inc. has agreed to acquire network services company Illuminet Holdings Inc. in a stock transaction worth some US$1.2 billion, VeriSign said in a statement this month.

The merger will allow VeriSign to offer services combining voice and IP (Internet Protocol) networks, such as secure short messaging; a system linking phone numbers and Web domain names, giving businesses a single point of contact; and a service called Global Voice Registry allowing callers to reach a business simply by speaking its name, VeriSign said.

Illuminet helps major wireless and fixed-line telecommunication carriers route calls to each other, and enables services such as caller identification and local number portability. VeriSign is best known for its management of the Internet’s .com, .net, and .org TLDs (top level domains).

Executives said the companies are a good fit, because they do similar things, only in different market spaces.

“Our network acts much like VeriSign’s DNS (domain name server) system, to help setup and routing over the voice network,” said Illuminet CEO Roger Moore during a conference call announcing the merger.

“Illuminet always thought that its opportunities for growth really came from the evolution of services we offer to the public-switched networks, or telephony world, to the next-generation networks,” he said, adding that when his company set about looking for partners to help it move into the IP world, it came across VeriSign.

VeriSign president and CEO Stratton Sclavos said that the DNS system will prove useful as more and more phone calls are routed to portable local numbers and via roaming, requiring a database lookup as the call is placed.

“Today we run this massive infrastructure that does these five billion DNS lookups” every day, he said. “We’ve been targeting to move that infrastructure into other market spaces; we believe very, very fast lookup and very, very fast routing can be applied to lots of other services,” including voice phone calls.

Under the terms of the deal, VeriSign will exchange 0.93 shares or options of its common stock for each outstanding share and option of Illuminet, and will assume Illuminet’s outstanding employee stock options. The merger, pending approval by government regulators and Illuminet shareholders, is to be closed in the final quarter of 2001 or the first quarter of 2002.

VeriSign, in Mountain View, Calif., can be reached at Illuminet, in Olympia, Wash., is at