WISeKey International Holding, a Swiss-based cybersecurity company, announced this week that it has entered into a binding agreement to acquire the semiconductor technology and business of INSIDE Secure, an embedded security solutions provider for mobile and connected devices.
The scope of the transaction would include the transfer of products, technology, customer agreements, and certain patents. More specifically, it would include the transfer of assets related to the development and sale of secure integrated circuits for the growing IoT market as well as a complete team in R&D, sales, marketing and support. The activities of INSIDE Secure to be acquired for IoT, anti-counterfeiting, brand protection, EMV payment card and secure access generated pro forma revenue (unaudited) of US$33.6 million in 2015.
Ongoing support and solutions would be provided to existing INSIDE Secure users for current products and development projects to ensure a smooth customer transition.
The terms and conditions of the transaction are in line with those announced on May 19, 2016. Upon completion of the transaction, WISeKey will pay INSIDE Secure CHF2 million in cash (net of transferred cash) plus bonds convertible into listed shares of WISeKey International Holding Ltd worth CHF11 million.
The transaction is due to close this September, and is subject to customary closing conditions, and to the French finance ministry’s approval since it involves the acquisition of control by a foreign company of a business operating in a strategically important area (provision of cryptology capabilities and services). INSIDE Secure’s integrated circuits will allow WISeKey’s cryptographic Root of Trust (RoT) and digital certificates to be hosted on a hardware vault that has received the highest level of certification to encrypt the communication and authenticate the devices.
Furthermore, it leverages the massive deployment of WISeKey’s RoT now embedded in more than 2.5 billion devices worldwide benefitting from the strong cryptographic capabilities to operate on induced power, allowing to be deployed in all sorts of IoT products.
The ability to authenticate and remotely manage millions of networked, automated devices and equipment is becoming pervasive − from the factory floor, to the hospital operating room, to the residential home − everything, from refrigerators, watches, wearables to wine bottles, is connecting and communicating through the Internet.
The Internet of Things security market is expected to grow from $6.89 billion in 2015 to nearly $29 billion by 2020 according to a report published by Markets and Markets, thereby growing at an annual rate of 35 percent over the next five years. These massively deployed connected objects are facing regular attacks hence generating a large need for trusted end-to-end cybersecurity solutions.
“With this acquisition, customers can directly purchase trusted end-to-end cybersecurity solutions from WISeKey, embedding personalization within Integrated
Circuits and having the highest level of security certification,” said Carlos Moreira, chairman and CEO of WISeKey, on the envisaged acquisition. “The acquisition of INSIDE Secure will significantly drive both short- and long-term revenue growth for WISeKey and also accelerate our strategy for global expansion. We are very excited about the opportunities ahead, and what we will be able to accomplish by working together with INSIDE Secure team.”