SAN FRANCISCO (03/08/2000) - Internet security provider VeriSign said today that it would acquire leading domain-name registrar Network Solutions in a stock swap. The swap was initially valued at $21 billion, based on VeriSign's closing price yesterday.
In early trading today, VeriSign lost 15 percent of its value, dropping $38.19 to $209.25 as of 11 a.m. EST. Network Solutions gained 16 percent in value, rising $57.69 to $418.31. In the all-stock deal, VeriSign will issue 2.15 shares of its common stock for each share of Network Solutions stock. VeriSign said it expects the deal to close in the third quarter, at which time Network Solutions will become a subsidiary.
The combined company will hire employees to continue expanding its services.
"VeriSign and Network Solutions have a longstanding partnership, which makes this combination a natural evolution for our business," said Jim Rutt, CEO of Network Solutions, in a statement. "Combining the two most trusted brands in Internet infrastructure provides millions of businesses and consumers with the confidence to conduct a broad range of e-commerce activities."
Network Solutions began as a government-sanctioned monopoly. For a time it was the sole registry of Internet domain names. Last year, the government began to open up the domain-name registration business to competition. VeriSign provides authentication, validation and payment-security services to Web sites and electronic commerce firms.