Verimatrix to sell Inside Secure silicon IP unit to Rambus

Wednesday, September 4th, 2019 
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Verimatrix Enters into Exclusivity Agreement to Sell its Silicon IP Business Unit to Rambus

  • Increases company focus as a pure player in software-based security and business intelligence solutions with revenue in excess of $100 million(1)
  • Increases financial flexibility thanks to a strong balance-sheet to seize external growth opportunities and keep on building a major player in software-based security
  • Transaction consideration of $65 million in cash

AIX-EN-PROVENCE, France & SAN DIEGO — Verimatrix (Euronext Paris: VMX), formerly known as Inside Secure, a global provider of security and analytics solutions that protect devices, services and applications, today announced it has entered into an exclusivity agreement to sell its Silicon IP and Secure Protocols (“SIP”) business unit to Rambus Inc. (NASDAQ: RMBS), a premier silicon IP and chip provider making data faster and safer, for a transaction consideration of $65 million in cash. The SIP business unit is a largely autonomous and hardware related business which generates $22 million revenue(1).

Strategic Rationale

  • Increase focus as a pure player in software-based security and business intelligence solutions with revenue in excess of $100 million1, serving primarily the entertainment, mobile application and IoT markets. This will enable Verimatrix to accelerate revenue growth in these fields through increased investments into new products and solutions, such as ProtectMyApp, a security-as-a-service solution that has been launched recently to revolutionize code protection by protecting mobile applications in minute.
  • Increase financial flexibility thanks to a strong balance sheet. At completion of the transaction, Verimatrix’s net debt(2) would be reduced to zero, thus allowing it to harness external growth opportunities while continuing to build a major player in software-based security.

“We are pleased to announce this exclusivity agreement to sell our Silicon IP and Secure Protocols business unit to Rambus, a premier silicon IP and chip provider,” said Amedeo D’Angelo, Chairman and CEO of Verimatrix. “This transaction ideally fits with our strategy to focus our company as a pure player in software-based security solutions. After completion, we will have the agility to fully address promising growth markets such as Entertainment, Mobile Applications and the Internet of Things. Additionally, the transaction will significantly increase our financial flexibility to seize external growth opportunities and reinforce our commitment to bringing the best value proposition to our customers.”

“The embedded security team at Verimatrix has a well-recognized and long-standing history of providing security at the heart of SoCs,” said Luc Seraphin, president and CEO of Rambus. “Their combination of products and expertise is highly complementary to our existing business and will expand our global reach for our worldwide security customer base.”

SIP business unit at a glance

The SIP business unit, one of the two business units of Verimatrix, generated $22 million in revenue1, representing 17% of the company’s revenue, for an EBITDA(2) margin consistent with the one of the company overall, operated by a team of about 72 people based in Europe, the U.S. and Asia.

The SIP business unit provides intellectual property components, software toolkits and provisioning solutions to enable semiconductor manufacturers and fabless companies, device manufacturers and security software integrators to meet the critical needs for secure communication and performance acceleration, information protection and user privacy for IoT and network security markets.

Transaction timeline

The transaction is intended to be signed in the third quarter of 2019 subject to completion of an information and consultation process with Verimatrix works council in France. It is expected to close in the fourth quarter of 2019 subject to customary signing and closing conditions.

1. Pro forma adjusted revenue for the last twelve-month ended June 30, 2019, see definition hereinafter.
2. Verimatrix uses performance indicators that are not strictly accounting measures in accordance with IFRS; definitions of adjusted financial measures are presented hereinafter.

Links: Verimatrix; Rambus