I’m late on this one but I felt compelled to weigh in on RIM’s impending $131-million (US$3 per share) takeover of Canadian security software maker Certicom.
As predicted here, Certicom succumbed to RIM’s second (hostile) takeover offer on Wednesday. RIM had to double its original offer, which is 43% higher than an overture from Verisign, to seal the deal for Certicom.
RIM’s victory, if you will, isn’t a surprise for a number of reasons.
First, Certicom or other subjects of a takeover offer almost never take the first offer from a potential suitor.
Second, RIM’s a better strategic fit for Certicom as the companies have worked together for years. This means RIM would spare almost no expense to win the day. RIM would rather control Certicom’s future than have it end up in the hands of Nokia or another partner that have licensing deals with the company. RIM needs Certicom’s technology to help it maintain what it considers to be a technological advantage with large organizations and key customers such as the U.S. Department of Defence.
Third, Certicom is a better strategic fit with RIM ,which has been on a patent collection tear for several years. Certicom has some 470 security patents, which helps RIM round out its patent portfolio once the deal is completed. RIM, as most tech followers remember, had to pay a firm called NTP $620-million in 2005 after a high-profile court battle that could have led to the shutdown of BlackBerry service in the United States.
One Comment on “RIM to take over Certicom: Reasons for the Deal”
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You’re right, there was no way that RIM was going to let Certicom be purchased by someone else. Verisign did Certicome shareholders a huge favour by getting involved in the bidding process.
Posted on February 15, 2009 at 5:01 pm.