ActivIdentity – CoreStreet Acquisition Agreement Announcement
ActivIdentity Corporation (NASDAQ: ACTI), a global leader in strong authentication and credential management, has acquired CoreStreet Ltd., a leader in distributed identity credential validation solutions. By combining the passion, creativity, and technology of two leading-edge companies, we believe we will continue to drive innovations that allow organizations to confidently establish a person’s identity when interacting digitally.
The acquisition of CoreStreet supports ActivIdentity's global vision of making every digital interaction trustworthy by adding distributed identity credential validation solutions and physical access control products to the company's broad portfolio of strong authentication and credential management offerings. CoreStreet’s PKI certificate validation technology is deployed by public and private organizations around the world to validate the credentials of individuals as they interact with their secure IT applications, including digitally signed email and secure forms. Additionally, The CoreStreet PIVMAN solution allows authorized personnel the ability to control access to any site with confidence by quickly authenticating and validating the roles and identities of individuals wishing to enter an area.
Frequently Asked Questions
Why is ActivIdentity acquiring CoreStreet?
With the addition of CoreStreet’s Public Key Infrastructure (PKI) certification technology, distributed identity credential validation system, and physical access control products, ActivIdentity believes the acquisition will strengthen its strong authentication and credential management product portfolio to confidently establish a person's identity when interacting digitally. As a result, ActivIdentity believes to meet a wider set of customer needs, extend its market reach and customer base, as well as increase its opportunity to grow into new markets.
How much is ActivIdentity paying for this transaction? What are the terms of the acquisition? Is this a stock or cash transaction?
The consideration for the acquisition of approximately $20 million will consist primarily of cash but will also include stock and warrants.
When is this transaction expected to close?
The acquisition was completed on December 14, 2009.
Will this transaction impact guidance for the remainder of ActivIdentity’s fiscal year?
ActivIdentity expects this acquisition to add on a full year basis approximately 10% to our revenue base and to be accretive to adjusted EBITDA.
What will the management structure look like?
Grant Evans will remain the chairman and chief executive officer of ActivIdentity. CoreStreet’s senior management will move into a variety of key management roles at ActivIdentity.
Will there be any changes to ActivIdentity’s Board of Directors?
No changes are planned.
Do you anticipate a reduction in force as a result of this transaction?
When two successful growing companies join together, the result is a combined organization that creates new and exciting opportunities. The combination will lead to powerful new areas of innovation, new products and solutions, and an acceleration of our respective growth agendas. At the same time, there will be some duplication of employee functions between the two companies. Thus, we anticipate some level of reduction in force. While we anticipate the integration team will identify opportunities for cost savings, the primary motivation for this acquisition is to continue to expand and grow our businesses into new markets.
Where will the company’s headquarters be based?
Headquarters for ActivIdentity will remain in Fremont, California.
ActivIdentity and CoreStreet both have offices worldwide. Which offices will remain open? Will there be office closures?
Where it makes sense, we anticipate consolidating facilities as appropriate. The integration team will review the worldwide locations of both companies and make recommendations regarding future plans based on our hiring plans and location of our customers.
Products and Solutions
What are the benefits of the combined product lines?
Many of our customer segments are complementary and in many cases customers in those segments are using products from both companies. ActivIdentity will be able to offer increased productivity through streamlined workflow and tighter integration.
Are there areas of duplication in product lines? If so, how will that be addressed?
ActivIdentity and CoreStreet are committed to serving the needs of our combined customers. The companies are largely complementary. A joint product roadmap will be developed as part of a comprehensive migration plan.
What happens to the CoreStreet brand?
Over time, CoreStreet products will transition to the ActivIdentity brand.
Will planned product releases for CoreStreet or ActivIdentity be affected?
Customers and Partners
Why is this good for customers?
ActivIdentity believes that this transaction will benefit customers across all segments the two companies serve – government agencies and enterprises. Combining the passion, creativity, and operational excellence of two leading-edge companies will allow us to better serve customers by accelerating innovations that change the way that digital interactions are made trustworthy.
What does this mean for CoreStreet’s and ActivIdentity’s business partners?
Together, ActivIdentity and CoreStreet will meet a wider set of customer needs by integrating products and technologies. Our combined technology portfolio will allow us and our partners to provide solutions for customers who want protection against security threats and identity fraud.
Should CoreStreet customers continue to call CoreStreet for support of their products?
Yes. CoreStreet customers should continue to contact CoreStreet support for CoreStreet products and solutions.
What do I do if I want to purchase a CoreStreet product?
Please visit the CoreStreet home page at CoreStreet.com .
How do the cultures of the two companies compare?
Both companies share a passion for innovation and a commitment to developing and delivering customer-driven software, ensuring a strong cultural fit.
How will the integration process of the two companies be managed?
ActivIdentity has a defined process for the integration, which will consist of multiple phases over incremental time periods (e.g., 30-day, 60-day, and 90-day plans) and be driven by the ActivIdentity management team.
Additional Information and Where to Find It
ActivIdentity Corporation intends to file a registration statement with the SEC. Investors and security holders are urged to read the registration statement when it becomes available because it will contain important information about the transaction. Investors and security holders may obtain free copies of the document (when it is available) and other documents filed with the SEC at the SEC’s website at www.sec.gov.