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VeriSign to Buy Cellphone Photo Pioneer for $270 Million
Published on:
SAN FRANCISCO -- VeriSign Inc. (VRSN) has agreed to acquire LightSurf Technologies Inc., a pioneer in cellphone photography led by entrepreneur Philippe Kahn, for $270 million in stock.
The deal represents an expansion in the mobile market for VeriSign, a Silicon Valley provider of telecommunications and Internet services that has been on a growth tear lately.
It is also marks another big payday for Mr. Kahn, who sold his StarFish Software to Motorola Inc. (MOT) in 1998 for $253 million. He is best known in Silicon Valley for founding what is now Borland Software Corp. (BORL), a once-formidable rival to Microsoft Corp. (MSFT) that went into a slump that led to Mr. Kahn's ouster in 1995.
VeriSign, based in Mountain View, Calif., expects the transaction to generate at least $30 million in additional revenue to the company in 2005, be neutral to 2005 per-share earnings and be "modestly accretive" to 2006 earnings per share.
The transaction is expected to close by the end of the first quarter, pending regulatory approval.
The deal highlights the surging popularity of camera-phones, which consumers use to take and share photos and video clips. LightSurf, a closely held company founded in 1998, has developed software and services that allow customers of North American carriers such as Sprint Corp. (FON) to e-mail such images. LightSurf works with cellphone makers to make sure it can electronically modify images so they can be properly displayed on various kinds of handsets and other computers.
VeriSign, meanwhile, has branched out from securing Web-commerce transactions to a range of other communications services. It operates a huge signaling network, which helps phone carriers manage transactions such as wireless text messages and cellular roaming, as well as the systems needed to help call up Web pages based on ".com" and ".net" addresses.
LightSurf has 250 employees, about half at its headquarters in Santa Cruz, Calif., and the remainder in Bangalore, India. Mr. Kahn, 52 years old, is expected to remain with VeriSign after the transaction.
-Don Clark; The Wall Street Journal; 415-765-6115
(END) Dow Jones Newswires "
Tags: [wall street journal] [verisign] [silicon valley] [pioneer]
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