0001012870-01-501981.txt : 20011009
0001012870-01-501981.hdr.sgml : 20011009
ACCESSION NUMBER: 0001012870-01-501981
CONFORMED SUBMISSION TYPE: 425
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20010925
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: ILLUMINET HOLDINGS INC
CENTRAL INDEX KEY: 0001002119
STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
IRS NUMBER: 364042177
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 425
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-27555
FILM NUMBER: 1744582
BUSINESS ADDRESS:
STREET 1: P O BOX 8
STREET 2: 4501 INTECCO LOOP
CITY: LACEY
STATE: WA
ZIP: 98507
BUSINESS PHONE: 3604936000
FORMER COMPANY:
FORMER CONFORMED NAME: USTN HOLDINGS INC
DATE OF NAME CHANGE: 19951012
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: VERISIGN INC/CA
CENTRAL INDEX KEY: 0001014473
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
IRS NUMBER: 943221585
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 425
BUSINESS ADDRESS:
STREET 1: 1350 CHARLESTON RD
CITY: MOUNTAIN VIEW
STATE: CA
ZIP: 94043
BUSINESS PHONE: 6509617500
MAIL ADDRESS:
STREET 1: 1350 CHARLESTON RD
CITY: MOUNTAIN VIEW
STATE: CA
ZIP: 94043
425
1
d425.txt
SUBMISSION FILED PURSUANT TO RULE 425
Filed By VeriSign, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933
And deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: Illuminet Holdings, Inc.
Commission File No. 000-27555
VERISIGN, INC.
SLIDE PRESENTATION CONCERNING
VERISIGN'S PROPOSED ACQUISITION OF ILLUMINET HOLDINGS, INC.
Slide 1:
[VeriSign Logo]
The Sign of Trust on the Net
VeriSign - Illuminet Roadshow
September 2001
Slide 2:
[VeriSign Logo]
Safe Harbor
This presentation contains forward looking statements including, future
projections, descriptions of management's plans and objectives for future
operations, statements of future economic performance and statements concerning
the assumptions underlying and relating to these projections, plans, objectives
and future performance. Actual results may differ materially from those stated
or implied by such forward-looking statements presented today. Factors that
could affect these forward-looking statements include, among others, potential
volatility in VeriSign's stock price, customer acceptance of new products and
services offered by the company, uncertainty of future revenue and profitability
and fluctuations in the Company's quarterly operating results and increased
competition for the services in our core businesses. More information about
potential factors that could affect the Company's business and financial results
is included in VeriSign's filings with the Securities and Exchange Commission,
especially in the Company's Registration Statement on Form S-4, Annual Report on
Form 10-K and Quarterly Report on Form 10-Q. Investors should not place undue
reliance on these forward-looking statements, which speak only as of the date of
this presentation
Slide 3:
[VeriSign Logo]
Transaction Summary
Exchange Ratio: -0.93 of a share of VeriSign for each share of
Illuminet
-Approximately 30.4 million VRSN shares will be
issued
Key Closing Conditions: -Illuminet shareholder approval
-Regulatory approval and other customary conditions
Financial Impact: -Immediately accretive to EPS
Expected Closing: -Calendar Q1 2002
Slide 4:
[VeriSign Logo]
Transaction Highlights
1. Consistent with VeriSign's strategy
2. Complementary customers, market focus and infrastructure
3. Synergies add to upside
4. Low execution risk
5. Accretive to margin structure and EPS
Slide 5
[VeriSign Logo]
SAME AS SLIDE 4
Slide 6
[VeriSign Logo]
Enable Everyone, Everywhere to
Use the Internet and the Telephony
Networks with Confidence
Slide 7
[VeriSign Logo]
Trusted Communications Services Infrastructure
[Two clouds representing VeriSign (Internet) on one side and Illuminet (PSTN) on
the other side. The VeriSign cloud has devices such as laptop computer, desktop
computer, and large server
stemming from it. The Illuminet cloud has devices such as telephone, mobile
phone, and a personal digital assistant (PDA).]
Any Device, Any Network, Any Protocol, Anywhere
Slide 8
[VeriSign Logo]
Different Language, Same Function
Internet (packet-based) Network Protocol PSTN (circuit-switched)
DNS Overlay Network SS7
Web browsers, e-mail Wired and wireless phones
ss.125mm hosts User Interface 195M lines
ss.trillions of pages/day 2bn calls/day
Global Registry Database Signal Control Points
ss.5bn look-ups/day (ss).3bn dips/day
Constellation servers and Set-up and Routing Signal Transfer Points
name servers and AIN servers
Slide 9
[VeriSign Logo]
Similar Service Offerings
[VeriSign Logo] [Illuminet Logo]
Registrar and Registry Adressing and SS7 Connectivity; Line
Navigation Information Database,
LNP Database
PKI, digital certificates, Authentication and Caller Name Database
enhanced entitlements Authorization and Fraud Management
Credit Card, ACH, Payment and Carrier Clearing,
B2B transaction management Clearing house Wireless pre-pay
Slide 10
[VeriSign Logo]
Illuminet Snapshot
. Illuminet is the VeriSign of the PSTN network
-Leading provider of SS7 network connectivity and intelligent network
services to telecommunications carriers
-Operates the largest unaffiliated SS7 network in the U.S.
. Network Services
-Network Connectivity (33%): provides carriers connectivity to SS7 networks
throughout the US via its 12 STP sites
-Intelligent Network Products (46%): local number portability,
line-information database, toll-free database, calling name database
-Roaming & Prepaid Platform (21%): Smartpay Prepaid Wireless, iRoam
. Highly predictable and recurring revenues -Scales with volume of calls,
database queries -Price protection under long term contracts
Slide 11
Consistent with Investment Highlights
[VeriSign, Inc. logo]
Leading provider of trusted infrastructure on the internet
Compelling end-to-end services offering
Highly differentiated market position,
Trusted third party
Key technology and distribution partnerships
Critical mass and global reach
Profitable, recurring business model
[Illuminet logo]
Leading provider of routing, directory and lookup services in the PSTN world
Suite of intelligent network and clearinghouse services
Number one market share, neutral player with large customer base
Partnerships with leading hardware and software vendors: Cingular Wireless,
Agilent, Ulticom etc.
Customer base of over 900 carriers and extensive network spanning North, Central
and South America
41% CAGR from 1996 to 2000, 31% operating margin in Q2:01 highly visible,
recurring business model
Slide 12:
The VeriSign Model
[Level 7] SME & Consumer / Global 2000 & Service Providers
[Level 6] Web Storefront ISPs / Direct Sales Registrars Affiliate
[Level 5] Value Added Services / Consulting Services
[Level 4] Hosting e-mail
[Level 4] Mass Markets Division / Enterprise & Service Provider Division
[Level 3] domain names web certs B2C pay / corp domain names managed
PKI B2Bpay
[Level 2] Name Services Authentication Services Transaction Services
[Level 1] Directory and Signaling Infrastructure (IP)
Slide 13:
Illuminet -- A New Engine of Growth
[Level 8] SME & Consumer / Global 2000 & Service Providers & Carriers
[Level 7] Web Storefront ISPs Carriers / Direct Sales Registrars Affiliates
[Level 6] Value Added Services / Consulting Services
[Level 5] Hosting e-mail
[Level 4] Mass Markets Division / Enterprise & Service Provider Division
[Level3] domain names webcerts B2C pay Trusted SMS / corp domain names
managed PKI B2Bpay SS7 services
[Level 2] Name Services Authentication Services Transaction Services
Telephony Services
[Level 1] Directory and Signaling Infrastructure (IP)
Slide 14:
Naming & Addressing Services
[Level 7] Naming Voice Presence
[Level 6] Managed DNS Secure DNS
[Level 5][different form of .com] [different form of .com] [different form of
.com]
[Level 4] .tv .cc .nu
[Level 3] .com .net
[Level 2] Domain Name Services [highlighted] Authentication Services
Transaction Services Telephony Services
[Level 1] Directory and Signaling Infrastructure (IP and PSTN)
Slide 15:
Authentication Services
[Level 8] Provising Authorization Federation
[Level 7] Wireless Broadband SmartCard
[Level 6] Healthcare Financial Services Government
[Level 5] VPN Messaging Extranet
[Level 4] Email/Brower Certs
[Level 3] Webcerts
[Level 2] Domain Name Services Authentication Services [highlighted]
Transaction Services Telephony Services
[Level 1] Directory and Signaling Infrastructure (IP and PSTN)
Slide 16:
Transaction Services
[Level 7] Transaction Coordination Trade Management Clearinghouse
[Level 6] International
[Level 5] Enterprise Supply Chain Wireless
[Level 4] ACH Purchase Card Fraud
[Level 3] Credit Card
[Level 2] Domain Name Services Authentication Services Transaction Services
[highlighted] Telephony Services
[Level 1] Directory and Signaling Infrastructure (IP and PSTN)
Slide 17:
Telephony Services
[Level 7] Unified Messaging eNum Location-based/Mobile Commerce
[Level 6] Enhance GVRS Trusted IM/SMS WebNum
[Level 5] Clearinghouse OSS/Billing/Intermediation Wireless
[Level 4] LNP Intelligent Network Services
[Level 3] SS7 Connectivity
[Level 2] Domain Name Services Authentication Services Transaction Services
Telephony Services [highlighted]
[Level 1] Directory and Signaling Infrastructure (IP and PSTN)
Slide 18:
Transaction Highlights
1. Consistent with VeriSign's strategy
2. Complementary customers, market focus and infrastructure [highlighted]
3. Synergies add to upside
4. Low execution risk
5. Accretive to margin structure and EPS
[VeriSign, Inc. logo]
Slide 19
[VeriSign Logo]
Complementary Trusted Services Model
Converged Network New Products and Services
Voice Registry, Secure SMS, eNUM, WebNum, PAM Services
Services Public Key Infrastructure, SS7 connectivity, LNP,
Global Registry, Web presence, 800 Calls, Roaming,
Payments Clearinghouse,
Inter-carrier Billing
Customers Enterprise and Mass Markets Wireless carriers,
ILECS, RBOCs, IXCs,
CLECs
Users Those accessing the Internet Those placing phone
Calls
Signaling and DNS and Resolution SS7
Directories
[VeriSign Logo] [Illuminet Logo]
Slide 20
[VeriSign Logo]
Massive Footprint
[VeriSign Logo] [Illuminet Logo]
Customers 3,300 enterprise customers 900+ carrier customers
6.5 million domain name Blue chip customer base,
customers including: ALLTELL, AT&T,
102,000 Web site certificate Cable & Wireless, Cingular
customers Wireless, Qwest, Sprint, Time
38 global affiliates Warner Telecom, Verizon
84 registrars
Look-up & -5.4 billion DNS resolutions per day -4 billion queries per week
Query -100 million database queries -200 mobile telephone
Infrastructure -Peak capacity of 20 to 25 billion switching offices in US
resolutions per day -Connected to 230 of nation's
-13 root DNS servers globally 237 LATAs
-Largest independent SS7
network in US
6 pairs of Illuminet-owned STPs
Database -32.4 million domain names in -32 million customer names in
the Registry the LDB
-16.0 million names in the -24 million calling name records
Registrar (CNAM)
-327,000 web site certificates -22% of all US LNP
issued -Handles 50%+ of U.S. wireless
-50,000 merchant accounts roaming calls
Slide 21
[VeriSign Logo]
Minimal Customer Overlap
Verisign, Inc.
Financial Services:
American Skandia Insurance
Bank of America
Barclay's Bank
Deutsche Bank
Diner's Club
Dow Jones
Federal Reserce Bank of NY
First Union Bank
First USA Paymentech
Merrill Lynch
Morgan Stanley Dean Witter
Novus/Discover
Royal Bank of Canada
Softbank
Southwest Securities
Sumitomo Bank
TransUnion
VISA
Manufacturing/Transportation:
CSX
Eastman Kodak
Ford Motor Company
General Electric Information Services
Gillette
Johnson & Johnson
Miller Brewing Company
UPS
Telecommunications:
AT&T
BellSouth
British Telecom
Japan Communication
SBC
Worldcom
NTT Communications
US West
Technology:
EDS
Agilent
Hewlett-Packard
Intuit
NEC
Netscape
NTT Data
Texas Instruments
Government:
State of New Jersey
Patent & Trademark Office
Veteran's Administration
Social Security Adminstration
US Army
Department of Agriculture
Department of Justice
FBI
IRS
National Security Agency
Illuminet:
Air Touch
ALLTEL
AT&T
BellAtlantic Mobile
BellSouth
Cable & Wireless
CenturyTel
CFW Intelos
Cingular Wireless
Citizens
Commonwealth Telephony
Destia Communications
Deutsche Telekom
eSpire Communications
Excel Communications
Frontier
Global Crossing
Golden States Cellular
Intermedia
McLeod USA
PacWest Telecom
Qwest
SBC
Southwestern Bell Wireless
Sprint
TDS
Telecom Malaysia
Teligent
Time Warner Telecom
US Cellular
US West
Verizon
Vodafone
Western Wireless
Worldcom
ZeroPlus Dialing
Slide 22:
Transaction Highlights
1. Consistent with VeriSign's strategy
2. Complementary customers, market focus and infrastructure
3. Synergies add to upside [highlighted]
4. Low execution risk
5. Accretive to margin structure and EPS
[VeriSign, Inc. logo]
Slide 23:
Convergence Paradigm
[Box]
#1 trusted services provider
Data and voice
Leverage DNS technology
VoIP bridge services
Trusted SMS and PAM Cross-selling opportunities
[Box above pointing to connection between two clouds]
[Cloud 1]
PSTN
[illuminet logo]
Pay Authentication NPAC Others [each represents SS7 switch]
[diagram: wireline telephone - cloud - wireless telephone]
[Cloud 2]
Internet
[VeriSign logo]
Pay Authentication Registry Database Others [each represents name server]
[diagram: mass markets - cloud - Enterprise]
[VeriSign, Inc. logo]
Slide 24:
[VeriSign logo]
Near Term Opportunities
-------------------------------------------------------------------------------------------------------------
Trusted SMS Services Leverage Super DNS Technology
------------------------------------------------------------------------------------------------------------
. Trusted SMS service between wireless . VeriSign DNS technology is directly
carriers and internet users extendable to the IN space
. Will also help landing trusted Presence and . Potential to bring cost advantages in the
Availability Management (PAM) service for range of 2-3 orders of magnitude
wireless and Internet (similar to Instant . Cost savings will drive operating margins
Messaging) and price competitiveness
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Next Generation Network Signaling Bridge Leverage Complementary Customer Relationships
-------------------------------------------------------------------------------------------------------------
. Translation bridge for traditional carriers . Through Illuminet carrier channels,
and next generation networks transitioning to VeriSign can sell its traditional services:
VoIP services web presence, online security and payment
. NGN carriers need to reach CNAM, LIDB and LNP services
. Clear near term revenue opportunity . Important new products that VeriSign is
developing depend on the carrier channel:
Global Voice Registry, WebNum and VoIP Registry
-------------------------------------------------------------------------------------------------------------
Slide 25:
[VeriSign logo]
Well Positioned for Future Growth
----------------------- --------------------- -------------------- --------------------- --------------------
Current Products Near Term Medium Term Long Term
Opportunities Opportunities Opportunities
----------------------- --------------------- -------------------- --------------------- --------------------
VeriSign . Enterprise . Enhanced Voice . Unified . eNum
Services Registry Services Messaging . Leader in
. Global . WebNum . Trusted converged
Registry . Trusted SMS Instant Messaging communication
. Registrar . Leverage . Location-based/Mobile
. Web Site DNS lookup
Certificates Commerce architecture
. B2C Payments
. SS7
Connectivity,
Switching and
Illuminet Transport
. Intelligent Network
Svcs
. Clearinghouse
. OSS Interconnection
. Seamless Roaming
----------------------- --------------------- -------------------- --------------------- --------------------
. Prepaid wireless
----------------------- --------------------- -------------------- --------------------- --------------------
[Background has a large arrow pointing from left to right]
Slide 26:
[VeriSign logo]
Enormous End-Market Opportunity
(MM) 2001 2004
Wireless Subscribers 825 1,650
Telephone Lines 1,000 1,250
Internet Users 525 875
Internet Devices 500 1,050
Source: IDC, Global Industry Analysts based on worldwide figures
Substantial opportunity for authentication, database and payment services
Slide 27:
[VeriSign logo]
Transaction Highlights
1. Consistent with VeriSign's strategy
2. Complementary customers, market focus and infrastructure
3. Synergies add to upside
4. Low execution risk
5. Accretive to margin structure and EPS
[Item 4 is highlighted]
Slide 28:
[VeriSign logo]
Low Execution Risk
. Both companies are strong stand-alone entities with proven track records of
execution
. No integration challenges
- Illuminet to operate under ESP Division
. Experienced management team
- Both companies have successfully completed several acquisitions
. Complementary service infrastructure
Slide 29:
[VeriSign logo]
Strong Market Opportunity
. PSTN services market is large and growing
- Expected to grow from $4.9 billion in 2000 to $10.8 billion in 2005
. Growth drivers include:
- Growth in voice traffic
- Increased trend towards outsourcing and offering differentiated
services
- Increased wireless penetration
- Local number portability for wireless
- Voice-data convergence
. Opportunity to accelerate revenue growth
- Illuminet currently carries 10% of overall communications traffic
- Early entrant in the wireless space with substantial room for
penetration
- DNS technology is directly extendable into the Intelligent Networks
space
Slide 30:
[VeriSign logo]
Transaction Highlights
1. Consistent with VeriSign's strategy
2. Complementary customers, market focus and infrastructure
3. Synergies add to upside
4. Low execution risk
5. Accretive to margin structure and EPS
[Item 5 is highlighted]
Slide 31:
[VeriSign logo]
Illuminet Financial Highlights
. Stable stand-alone business
- Q2 revenues of $47 million and $0.29 in EPS
. Transaction-based revenue base
- 98% of revenues from recurring streams
- 41% revenue CAGR 1996-2000
. Highly profitable business model
- 82% gross margin and 30% operating margin in Q201
. High degree of visibility
- Exceptional visibility at the beginning of the quarter
- Solid balance sheet
- Healthy cash position, low DSOs
Slide 32:
[VeriSign logo]
Excellent Financial Profile
[1 bar chart showing historical and projected yearly revenue for Illuminet
historically for 1998, 1999 and 2000, and expected revenue from CS First Boston
equity research for 2001.]
Slide 33:
[VeriSign logo]
Pro Forma Financials - Historical
[Table showing for both VeriSign, Illuminet and VeriSign + Illuminet (based on a
0.93 exchange ratio), historical 2000 and historical second quarter 2001
revenues, sequential revenue growth, gross profit, gross margin, operating
income, operating margin, net income, net margin and EPS]
Slide 34:
[VeriSign logo]
Financial Impact
. Enhances revenue model
- Transaction-based
- Volume driven
- Price protection through long-term contracts
. On a pro forma basis, expands gross margin from 66% to 70%
. Expands operating margin further
. EPS accretive by 5-7% in 2002
Slide 35:
[VeriSign logo]
Consistent with Investment Highlights
VeriSign Illuminet
Leading provider of trusted infrastructure services Leading provider of routing, directory and look-up
on the Internet services in the PSTN world
Compelling end-to-end service offering Suite of intelligent network and clearinghouse
services
Highly differentiated market position, trusted third Number one market share,
neutral player with large party customer base
Key technology and distribution partnerships Partnerships with leading hardware and software
vendors: Cingular Wireless, Agilent, Ulticom, etc.
Critical mass and global reach Customer base of over 900 carriers and
extensive network spanning North, Central
and South America
Profitable, recurring business model 41% revenue CAGR from 1996 to 2000; 31%
operating margins in Q2:01; highly visible,
recurring business model
[Large check box with check between columns for each of the 6 items listed
above]