BeTrusted Inc and TruSecure Inc have agreed to merge to form a $160m-a-year security services firm called CyberTrust. The deal, to be announced today, will create a company with about 1,000 employees around the world.
The combined companies will be one of the largest information security companies in the marketplace, certain one of the largest in terms of employees and revenue dollars, said John Becker, CEO of TruSecure and slated to be CEO of CyberTrust.
The stock-swap deal creates a company focusing on security consulting and managed services in the areas of vulnerability, threat, identity and compliance management, competing with the likes of VeriSign and Symantec, Becker said.
The combined companies, with offices in 27 countries, have been backed to the tune of $250m in total, he said. Of the expected annual revenue BeTrusted is a $110m-a-year firm, while TruSecure brings in about $50m, he said.
Rick Smith of One Equity Partners, Bank One’s venture capital arm, who has been chairman of BeTrusted since OEP purchased the company from PricewaterhouseCoopers in January, will also chair the new company.
BeTrusted has been on the acquisition trail all year, most recently purchasing about 90% of Ubizen BV. Becker said that deal, along with others, mean CyberTrust does a third of its business in Europe, a third in North American and a third in Asia-Pacific.
Ubizen’s CEO, Stijn Bijnens, will become CyberTrust’s chief strategy officer in charge of CyberTrust’s go forward strategy, Becker said. BeTrusted EMEA CEO Brett Jackson becomes COO of the merged company.
Becker said the firm is not expecting any more major acquisitions after the closure of the TruSecure deal, which is expected in the next 30 days. It looks like CyberTrust may now be focused on the integration phase of its strategy.
Customers are looking a large stable player, there’s a tendency not to deal with smaller players in you’re a large organization, Becker said.
Becker said that the first priority is to get the three major parts of the business behind a unified brand and marketing strategy. This, and the roadmap for integrating services, should be complete by the beginning of 2005, he said.
While CyberTrust will compete against giants like IBM Global Services, Becker named Symantec and VeriSign – companies that have placed growth hopes on managed security services offerings but have relatively small services revenues – as key competitors.
Symantec sees just 2% of revenue from security services – about $11m a quarter – but had growth of 14% last quarter. VeriSign does not break out its security services revenue, except to say that it forms a small part of its $139m-a-quarter internet services business.
CyberTrust will resemble VeriSign more than Symantec. BeTrusted brings Baltimore Technologies’ and Ubizen’s experience in the public key infrastructure products and service market, where VeriSign leads.
CyberTrust has already had one marketing hiccup. While the firm owns the CyberTrust trademark, the domain cybertrust.com was snapped up by a remarkably prescient Korean speculator last Tuesday, but has since been reacquired by CyberTrust.