VeriSign Divests Messaging Biz

VeriSign Inc. (VRSN - Analyst Report) yesterday agreed to sell its messaging business to Syniverse Holdings Inc. (SVR - Snapshot Report) for $175 million. The transaction is subject to certain closing conditions and regulatory approvals.

Headquartered in Mountain View, California, VeriSign provides essential Internet infrastructure services to companies, service providers and website owners.

Tampa, Florida-based Syniverse provides wireless voice and data services for telecommunications companies worldwide. The company said that the deal will expand its mobile messaging capabilities and increase its global footprint through nearly 300 additional employees in the United States and Asia Pacific.

The messaging business has had an annual revenue run-rate of approximately $140 million over the last 12 months. With this divestiture, VeriSign will be left with only one of its thirteen businesses to divest. From November 2007 to date, the company has sold twelve non-core units for $750 million. The business which remains to be sold is Global Security Consulting.

VeriSign plans to invest proceeds from the divestitures into its core businesses (Internet Infrastructure and Identity Services). It is also using funds to buy back shares and has already repurchased shares worth $22.6 million in the first half of 2009.

Earlier this month, VeriSign reported second-quarter results in line with Street expectations. Management said macroeconomic environment remains challenging. As the Internet expands to mobile devices, we see VeriSign tapping this growth market with an array of value-added services. Moreover, we believe the company has substantial growth opportunities in the areas of intelligent supply chains, real-time publishing and interactive television.