Entrust to merge with security software firm

The companies said the merger will create a leading builder of security and portal infrastructure. The number of acquisitions in the business-to-business category is rising, and the red-hot segment may be approaching a shakeout period much like the business-to-consumer market is experiencing.

Plano, Texas-based Entrust Technologies will issue about 8.2 million shares of common stock in exchange for all of the enCommerce's outstanding capital stock. The deal will result in a total share exchange of 10.25 million shares, Entrust said in a press release.

In the security software category, Entrust rival VeriSign last month acquired Net name registrar Network Solutions for $21 billion in stock. The Gartner Group predicts that in the next four years, business-to-business transactions will reach about $7.3 trillion.

"The evolution of the Internet as a platform for worldwide commerce and information exchange is fueling demand for comprehensive solutions," said Entrust chief executive John Ryan in a statement. "enCommerce complements our leadership in securing online business transactions and communications with superior functionality for giving users secure and personalized access through the portal."

Entrust and Santa Clara, Calif.-based enCommerce will combine their global operations and Entrust's security software with enCommerce's portal infrastructure products, the companies said. Entrust and enCommerce said they will offer businesses the ability to know with whom they are doing business, authorize and confirm individual transactions, and communicate privately.

Privately held enCommerce makes software that enables large businesses to create a personalized Web experience for each of its customers.

Entrust, VeriSign and Baltimore Technologies' CyberTrust are in the business of securing online transactions using PKI--essentially, digital certificates of authenticity.

The new company has 800 employees and more than 1,500 customers worldwide.