Baltimore Technologies, the Irish-founded e-commerce security company, has beaten off key competitors in the US to secure its most significant contract to date, valued at $30 million (€29.4 million). Its share price on the London stock exchange soared 12 per cent yesterday to close up 92.5 pence sterling at 877.5 pence sterling.
It has been chosen to supply security software for Internet transactions to an international banking consortium, Identrus, comprised of eight of the leading names in the international banking community. They include ABN AMRO, Bank of America, Barclay's Bank, Chase Manhattan, Citigroup, Deutsche Bank - including recent acquisition Banker's Trust - and Hypo Vereinsbank.
"This represents a huge endorsement of the company in the US, as it is the first big initiative in the Internet area by the banking sector. It sets the tone for the future of Baltimore, and establishes us well to tackle the US market aggressively. This is a very good barometer of how we are being viewed in the US," said Mr Fran Rooney, chief executive of Baltimore Technologies.
The deal could allow Baltimore review its prediction that it would make a loss for this year, although Mr Rooney says it plans to continue along its aggressive growth path. Baltimore's current strategy involves continually looking at investment opportunities which might help it achieve a critical mass, particularly in the US. Mr Rooney says the latest deal is likely to generate revenues this year of around $500,000 (€490,436) as Baltimore deploys its technology to umbrella company, Identrus. These revenues will then snowball as Identrus rolls out Baltimore's public key infrastructure (PKI) technology to each of the consortium banks. Mr Rooney says the technology is already being piloted in a number of these banks, and he expects a full commercial introduction of the Identrus service next year.
Using Baltimore's UniCERT system, Identrus will issue digital certificates to member organisations. They will act as digital passports or identifications, which will immediately provide the participants in a transaction with universally recognised banking authentication. The authorisation can be used for a range of online activities, including supply chain management, real time payment and invoicing, government filings and procurement contracts.
The US is now the fastest growing and most significant market for Baltimore. In January it stepped up its campaign there against competitors VeriSign and world PKI leader, Entrust Technologies. Baltimore employs 50 people in the US, and Mr Rooney says another 10 people are about to be switched across from Europe, where 350 people are employed, as the US market now accounts for 50 per cent of its business.
Despite the boost to Baltimore's stock price following its tie-up with Zergo Holdings last year, it valuation on the market still lags Entrust and Verisign. That deal involved a shift in business focus from sales of hardware, third party products and services towards sales of PKI software.
Under a takeover last year, Baltimore was sold to Zergo Holdings for around $60 million (€58.8 million). Under that deal, Mr Dermot Desmond who held an estimated 60 per cent stake, ended up with 15 per cent of the merged company, Mr Fran Rooney with 4 per cent, and another 8 per cent was divided among Baltimore employees.
