LF IT Services
VeriSign to Sell Network Solutions Business to Pivotal Private Equity
By VeriSign
Oct 16, 2003, 17:16

VeriSign to Sell Network Solutions Business to Pivotal Private Equity

.com and .net Registry and Naming and Directory Services Infrastructure to Remain with VeriSign as Cornerstone of Internet Infrastructure Business

Mountain View, CA, October 16, 2003 VeriSign, Inc, the leading provider of critical infrastructure services for the Internet and telecommunications networks, today announced it has signed a definitive agreement to sell the Network Solutions business unit to Pivotal Private Equity. Under the terms of the agreement, VeriSign will receive approximately $100 million, consisting of $60 million in cash and a $40 million senior subordinated note. VeriSign will also retain a 15% equity stake in Network Solutions. The transaction is subject to certain closing conditions and is anticipated to close in the fourth quarter.

When VeriSign acquired Network Solutions in 2000, it obtained two distinct businesses:

• The customer-facing Registrar business is the world's leading provider of domain name registrations, and an industry leader in value added services such as business email, websites, hosting and other web presence services. The Registrar, which re-assumed the Network Solutions name in January of this year, constitutes the current Network Solutions business that is being sold.
• The Registry business that is the backbone of the global .com and .net domain name infrastructure currently handles over 10 billion interactions per day, remains with VeriSign as a critical component of its business. This Registry business was recently renamed VeriSign Naming and Directory Services and is a core piece of VeriSign's Internet Services Group.

"We believe that this transaction will strategically position VeriSign to focus exclusively on our core mission of providing critical infrastructure services for the Internet and telecommunication networks, while allowing Network Solutions to pursue its own independent strategy in the web presence market." said Stratton Sclavos, Chairman and CEO of VeriSign.

"Network Solutions has a strong base of over four million satisfied customers," said J. Jahm Najafi, the Chief Executive Officer of Pivotal Private Equity. "We will continue to provide stellar service, launch innovative products, and build new channels of distribution to accelerate the rate of market growth. This broader set of products will make Network Solutions the one stop shop for web presence services."

VeriSign's core infrastructure services continue to be organized around the company's two core services areas:

Internet Services Group

• Security Intelligence and Control Services - Strong authentication, network, application and commerce security services for thousands of enterprises and hundreds of thousands of websites. The Security business unit also provides payment gateway and fraud protection services for close to 100,000 online merchants.
• Naming and Directory Services - DNS database management and resolution services for approximately 30 million digital identities, including the authoritative directory for all .com, .net, .cc, and .tv domain names. The unit also provides Digital Brand Management Services and DNS Assurance services for large enterprises with complex domain name and IP addressing portfolios.

Telecommunications Services Group

VeriSign provides managed communication services for wireline, wireless and next generation carriers. Current offerings include Signaling System 7 (SS7) signaling and connectivity, intelligent database services, pre-pay and post-pay billing services and clearing and mediation services. VeriSign serves nearly 1,000 voice and data communication service providers throughout North, South, Central America, and the Caribbean.

Earnings Conference Call
VeriSign will provide further information on the sale of Network Solutions, including details of the financial impact of the transaction, during the company's regularly scheduled Q3 2003 Earnings Call on Thursday, October 23. See the VeriSign's web site at www.verisign.com for conference call logistics.

About VeriSign
VeriSign, Inc. (Nasdaq: VRSN), delivers critical infrastructure services that make the Internet and telecommunications networks more intelligent, reliable and secure. Every day VeriSign helps thousands of businesses and millions of consumers connect, communicate, and transact with confidence. Additional news and information about the company is available at http://www.verisign.com.

Statements in this announcement other than historical data and information, including but not limited to, statements regarding revenue and earning expectations for future quarters, and new business relationships and new service offerings, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve risks and uncertainties that could cause VeriSign's actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, the uncertainty of future revenue and profitability and potential fluctuations in quarterly operating results due to the sale of Network Solutions, the potential loss of customer leads generated from the Network Solutions' retail storefront, the inability of VeriSign to successfully develop and market new services or the failure of new services to gain customer acceptance, reduced demand for our services as a result the sale of Network Solutions. More information about potential factors that could affect the company's business and financial results is included in VeriSign's filings with the Securities and Exchange Commission, including in the company's Annual Report on Form 10-K for the year ended December 31, 2002 and quarterly reports on Form 10-Q. VeriSign undertakes no obligation to update any of the forward-looking statements after the date of this press release.

Contact Information:
VeriSign Media Relations: Tom Galvin, tgalvin@verisign.com, 202-973-6610
VeriSign Investor Relations: Katie Bare, kbare@verisign.com, 650-426-3421