— Research In Motion Ltd. has prevailed in its pursuit of Certicom Corp., after California-based VeriSign Inc. announced that it would not match RIM's $3-a-share offer.
Certicom has about 43.7 million shares outstanding, making the deal worth more than $130-million.
RIM launched a hostile bid in December for Certicom at $1.50 a share, setting off a bidding war with VeriSign.
Certicom said Tuesday it was told by VeriSign that it would not match the $3-a-share offer from Waterloo, Ont.-based RIM.
RIM's offer topped a $2.10-a-share offer previously agreed to between VeriSign and Certicom.
Certicom said it paid a $4-million break-up fee to VeriSign.
"The Board of Directors of Certicom has concluded that the RIM transaction is in the best interests of the Corporation, and unanimously recommends that shareholders of Certicom vote in favour" of the offer, Jeffrey Chisholm, chairman of Certicom's board, said in a statement released Tuesday night.
A special meeting of shareholders will be held to vote on the arrangement.
Speaking before the deal was announced, one technology analyst says RIM's takeover of Certicom would mean some notable changes would be afoot for the maker of the BlackBerry mobile device.
Carmi Levy, an analyst at AR Communications Inc., says RIM will find itself in the position of gatekeeper when it officially gets its hands on Certicom — a company that holds a "critical" encryption technology for the industry.
RIM has used Certicom encryption technology in its BlackBerry devices for years.
"Strategically, it's a great place (for RIM) to be simply because encryption is going to be increasingly important as wireless technology becomes even more mainstream," Mr. Levy said.
"Companies that hold the reins to those technologies will gain competitive advantage over those companies that don't."
"The fact that they (RIM) were going up against VeriSign illustrates quite nicely how this technology can go places far beyond just the smartphone market," Mr. Levy said.
California-based VeriSign offers various Internet security services like digital certificates, payment processing and secure downloadable digital content.
Under the deal, RIM will have access to encryption technology that could help create new BlackBerry devices that will work like personal wallets, as well as mobile phones.
That could mean BlackBerrys with the same abilities as credit and debit cards — and the ability to pay for items at the cash register through wireless mobile device transactions with retail partners.
Mr. Levy also noted that having Certicom under its wing will give RIM a competitive advantage because several key competitors use Certicom technology, including Texas Instruments and IBM.
"RIM in many respects, will be in the captain's seat because it will be able to control who has access to that technology and how much they'll pay for the privilege," he said.
"Three bucks a share is a relatively small price to pay to have that market advantage."
Mobile phone developers have been searching for new ways to increase their revenues as the economy slows and fewer consumers look to purchase new devices.
"I would suspect that we may see more deals like this for wireless handheld makers starting to move beyond their traditional roots are hardware vendors," Mr. Levy said.
