ActivIdentity acquires CoreStreet for $20 million

Tuesday, December 15, 2009

FREMONT, Calif.—ActivIdentity Corporation, an authentication and credential management provider, announced it has entered into an agreement to acquire CoreStreet, a provider of distributed identity credential validation solutions for $20 million. The acquisition, which is expected to be completed this month, is primarily cash a cash transaction, but will also include stocks and warrants.

According to Grant Evans, chairman and chief executive officer of ActivIdentity, the acquisition will strengthen ActiveIdentity’s authentication and credential management product portfolio as well as its foothold in the U.S. market, specifically in the U.S. government sector. He said CoreStreet will add approximately $7 million to the company’s nearly $63 million in revenue. “It’s strategic to grow our top line and more importantly we believe we can grow faster with CoreStreet’s products,” he said. “We picked up a lot of new customers we didn’t have previously and the products themselves are complementary to ours and there’s almost zero overlap.”

Since Evans and his management team took over 18 months ago, he said the company has experienced approximately six percent growth during phase one, which was to create a solid base of operations. This second stage, which the company entered on Oct. 1, is intended to grow the company. “Our growth strategy is to bring more products into the company via acquisition and to build out a unique position around strong authentication and credential management products so that when we put the pieces together  they will deliver to the company and will drive double-digit organic growth year over year,” he said.

While ActivIdentity’s strongest markets will continue to be government and enterprise solutions, Evans said he expects the largest future growth to come from the business-to-customer commerce market, particularly the use of mobile digital products to conduct business operations. “We’re involved in online banking and mobile banking and using mobile cards [i.e. cell phones] to behave like credit cards,” he said. “We protect the identity and protect the digital transaction. We want to build out our products and portfolio on an end-to-end basis and be able to deliver solutions for this digital interaction in a secure manner.”