Entrust Agrees to Buyout

Blogger: Mark Diodati

You may have read that Entrust has agreed to be bought out by a private-equity firm (Thoma Bravo LLC). The deal must be approved by the shareholders. Consider some milestones for Entrust this decade:

• 2000 - Entrust acquires EnCommerce (a web access management [WAM] company) for $470 million

• 2006 - Entrust acquires Business Signatures (a consumer authentication company) for $55 million

• 2009 - Entrust agrees to buyout for $114 million

It’s a little shocking to see that Entrust will be acquired for 22% of the cost of these two acquisitions, and only two times the cost of the relatively small Business Signatures acquisition.

While we know little about Thoma Bravo, it does not appear likely that it will close Entrust’s doors and sell its intellectual property. Our conversations with the Entrust folks support this, as they told us that Thoma Bravo has retained 11 of the past 12 management teams (the one management team apparently left under a cloud of illegal activity). A list of Thoma Bravo’s current software and technology investments can be seen here.

My recommendation to Entrust customers: stay the course until more information is known. My assessment regarding its PKI technology is that it remains superior and complementary to its primary competitor (Microsoft) – for now. For example, the Entrust Entelligence Security Provider (ESP) provides essential PKI features not present in the operating system. The company has a competent WAM solution, which includes centralized agent management and federation support.

My colleague Bob Blakley offered valuable insight; specifically that the buyout was the day that the PKI business died. He’s on to something. I would qualify his comment by saying that yesterday was the day that Big PKI died. Entrust cast a large shadow in the late 90's as the intellectual leader for enterprise PKI, but times have changed as Microsoft Windows’ PKI capabilities have increased. There are a few companies that started with PKI as the primary technology (Arcot and TriCipher come to mind), but for the most part these companies have diversified into consumer authentication, cloud-based authentication, and SSO services. RSA has de-emphasized its PKI offerings since its acquisition of Xcert in 2001.

Comments

[KeithD]

Big PKI dead ? Challenging thought - but must agree that PKI has been around for ages and not really taken off the way we expected.

So can we have a more in depth discussion of this in one of your upcoming reports please ?