The Register

  22 September 2003 
  Updated: 13:23 GMT 

Baltimore sells 'crown jewels' 
By John Leyden 
Posted: 22/09/2003 at 13:18 GMT 

Security company Baltimore Technologies today announced a "conditional agreement" to 
sell its core public key infrastructure (PKI) business to US firm beTRUSTed for $5 
million in cash. 

The sale of Baltimore's 'crown jewels' to BeTRUSTed (which is owned by Bank One's One 
Equity Partners) effectively winds up the company, analysts say. 

In a statement, Baltimore said the planned sale of its PKI business completes its 
disposal programme. The sale involves the transfer of staff to BeTRUSTed and is 
subject to shareholder approval - but that is likely to be a formality. 

Baltimore recently sold off its SelectAccess authentication, OmniRoot and managed 
services operations. These, together with the earlier sale of content filtering 
technologies to Clearswift and other businesses, have left Baltimore as a ghost of its 
former self. 

Baltimore is today valued at around 22 million compared to its peak valuation at the 
height of the dotcom bubble of 5.5 billion. 

Unrestrained optimism that Baltimore's security technologies would become the 
foundation of an ecommerce boom propelled Dublin-based Baltimore into the FTSE 100 
index in the late 1990s. But sales never met expectations and Baltimore's stock price 
plummeted as its cash reserves dwindled. 

So the company was forced into a fire sale. 

Baltimore secured a much needed cash lifeline with the sale of its content security 
business to UK software firm Clearswift Corporation for 20.5 million in January 2001. 
But the deal represents only a tiny fraction of the 692 million Baltimore paid for 
Content Technologies at the height of the stock market boom in 2000. 

With hindsight, Baltimore's idea to combine encryption with content filtering 
technology appears fundamentally misconceived. The company would have done better to 
concentrate on making its core PKI technology easier to deploy, a shortcoming that 
became a key reason Baltimore's UniCERT PKI technology never went mainstream. 

Strategic mistakes alongside the bursting of the dotcom bubble resulted in Baltimore's 
inexorable decline. Baltimore employed 1,400 workers at its peak but now only has 255 
people on its books. The disposal of its core PKI business is seen by some as the 
final chapter in the Baltimore story. 

"This is kind of the final disposal... this is the end, really," analyst Barry Dixon 
of Davy Stockbrokers in Dublin, told Reuters.  

R. A. Hettinga <mailto: [EMAIL PROTECTED]>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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