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Baltimore Technologies Completes Divestment
Programme with Sale of Core PKI Business to beTRUSTed
London, UK - 22 September 2003
Baltimore Technologies (London: BLM), ("Baltimore")
today announced that it has entered into a conditional agreement
with beTRUSTed to sell its core PKI business for a total consideration
of £5.0 million in cash. The sale is subject to approval by
Baltimore's shareholders at an Extraordinary General Meeting, and
a circular with notice of the Meeting will be sent shortly.
Following the recently announced sales of SelectAccess, OmniRoot
and Managed Services, the sale of the PKI business completes Baltimore's
disposal programme. Once completed, these transactions, together
with the settlement with Clearswift, will have generated total cash
proceeds of approximately £20.9 million since July. The sale
of SelectAccess to HP has now closed and funds have been received
on 18 September, 2003.
Comment
Bijan Khezri, Chief Executive Officer of Baltimore Technologies
plc, commented:
"We firmly believe in the need for scale to continue driving
consolidation of the software industry worldwide. The long-term
competitiveness of the PKI business requires critical mass and beTRUSTed
has emerged as an excellent partner to take our PKI technology and
customer base to its next level.
This transaction is our last significant asset disposal and will
deliver on our commitment to eradicate operational cash burn and
maximize shareholder value. The cash balance resulting from Baltimore's
successful asset disposals effectively puts the future strategic
options available to Baltimore Technologies into a new perspective.
We remain committed to maximising value for our shareholders and
we look forward to providing an update in due course."
"We are extremely pleased to acquire the Baltimore PKI business
and its world-class clients, employees and software. Over 75% of
our clients have made significant investments in Baltimore's PKI
suite which we have implemented and operated for many years. We
believe that beTRUSTed's ownership will provide the necessary stability
and support for existing and prospective clients to build and deploy
critical business applications that leverage Baltimore's technology,"
said John Garvey, Chief Executive Officer of beTRUSTed."
Rationale for the divestment
Since the launch of the controlled sale process in May, Baltimore
has believed that the Company lacks critical mass. During the course
of the past two years the Company has succeeded in significantly
reducing operational cash burn. However, Baltimore alone does not
represent a platform on which to consolidate. The need for scale
in today's infrastructure software market makes the disposal of
Baltimore's core PKI business an obvious proposal. As a highly customer-centric
organization, it is critical for Baltimore to provide a sustainable
long-term direction to our customers. beTRUSTed represents an ideal
partner in that regard.
Financial effect of the disposal
The Company intends to use the cash proceeds of £5.0 million
from the disposal, payable at completion, for general corporate
purposes. Baltimore expects that the disposal will complete by the
end of November 2003.
Restructuring
As a result of this transaction, certain PKI employees will transfer
to beTRUSTed. The PKI group will remain principally Ireland-based.
Baltimore will implement a redundancy programme for the majority
of its remaining employees.
Information on PKI business
The PKI business is the core of Baltimore's ongoing revenue generating
business. With over 300 customers worldwide in the high-end government,
finance and telecommunications market, Baltimore's flagship product,
UniCERT, is the world's leading PKI infrastructure. Baltimore's
PKI products ensure organisations can securely leverage the power
of web and wireless networks, for cost-efficient commerce and collaboration,
to achieve a sustainable competitive advantage while reducing overall
risk.
Based on unaudited management information for the twelve-month
period ended 31 December 2002, the PKI business generated revenues
of £19.3 million and a loss before interest and tax of £11.1
million. As at 31 December 2002, the net liabilities of the PKI
business were £42.8 million. This is largely represented by
an intercompany payable to the parent company for the funds which
were made available to the business, from the fundraising exercise
carried out in 1999.
About Baltimore Technologies
Baltimore Technologies' products, professional services and solutions
solve the fundamental security needs of e-business. Baltimore's
e-security technology gives companies the necessary tools to verify
the identity of who they are doing business with and securely manage
which resources and information users can access on open networks.
Many of the world's leading organisations use Baltimore's e-security
technology to conduct business more efficiently and cost effectively
over the Internet and wireless networks.
Baltimore's products and services are sold directly and through
its worldwide partner network, Baltimore TrustedWorld. Baltimore
Technologies is a public company, principally trading on London
(BLM).
For more information on Baltimore Technologies please visit www.baltimore.com
About beTRUSTed
beTRUSTed is the premier global provider of security and trust
services to the world's leading organisations and government agencies.
Through its managed security services, beTRUSTed offers clients
a comprehensive package of leading security products coupled with
unrivalled expertise to help reduce costs, increase revenue and
comply with government and industry regulations.
For more information www.baltimore.com
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