Diversinet Buys Boston-Based Caradas, Expands Push Into U.S.
Strengthens secure wireless offerings into global finance, government sectors
TORONTO, September 9, 2003 – Diversinet Corp. (OTCBB: DVNTF) today announced it has significantly expanded its opportunities in the financial services and government sectors by acquiring Caradas, Inc. in an all-stock transaction. Caradas, founded in 2001, has annual revenues of approximately US$4 million and is currently profitable.
“The list of the wireless sector’s potential killer applications is expanding rapidly, including everything from new types of mobile payment techniques to software applications that enable a workforce to go wireless,” said Nagy Moustafa, president and CEO of Diversinet. “Our acquisition of Caradas puts us in a position to provide the security infrastructure for many of those applications.”
Diversinet’s acquisition of Caradas and its digital identity and authentication management technology broadens the Diversinet skill set, gives the company a deeper knowledge of financial applications and provides established relationships with important financial customers, including Visa, MasterCard, Fleet Bank, First National Bank Omaha, and other institutions. Caradas also operates Caradas Labs, an independent test facility, providing functional, security, and standards testing services to the financial services industry.
Diversinet, over the past seven years, has been a provider of secure mobile solutions. It enables its customers and their employees to securely access applications and critical corporate information from anywhere, at anytime and via any mobile device.
“For Caradas, the acquisition provides a broader framework to expand relationships with key customers such as Visa and to enlarge our geographic reach to include Asia-Pacific, Europe, and Canada,” said Caradas founder and chairman Charles Walton.
Besides accelerating Diversinet’s push into the financial services sector, the acquisition also strengthens the company’s technology offering to U.S. government sectors. Caradas has an office in Washington, D.C. and has a highly successful security consulting services team, in addition to its technology platform.
“The importance to the government of secure wireless communications cannot be overestimated,” said J. Scott Lowry, President & CEO of Caradas. “It is clearly a top priority of the federal government, and we look forward to bringing Diversinet’s mobile security product suite and technical expertise to bear in helping the government solve this critical problem.”
Mr. Moustafa said that combining Diversinet’s focus on secure mobile solutions for banks and government with Caradas’ experience providing authentication management solutions to some of the nation’s largest banks creates a business that is better than the sum of its parts.
“This acquisition creates immediate value for our shareholders because Caradas is a profitable business, it brings us a stellar management team, and it puts Diversinet in a very favourable position in what we expect will be one of the fastest growing segments of the wireless market,” said Mr. Moustafa.
Under the terms of the acquisition, Diversinet has issued to Caradas stockholders 1,350,000 common shares and 200,000 share purchase warrants at US$2.45 exercisable over five years. Of the 1,350,000 common shares, 1,150,000 will be held in escrow for one year, and released on an equal monthly basis over the second year. The remaining 200,000 common shares will be registered with the U.S. Securities & Exchange Commission after the closing of the transaction.
About Diversinet Corp.
Diversinet is a leading provider of secured mobile solutions to the enterprise, financial services, and gaming and wagering marketplaces. With demonstrated expertise in wireless and security, Diversinet delivers secure, reliable and scalable mobile solutions through security products and professional services such as application development and integration, consulting, training and technical support. Diversinet enables customers and their employees to securely access applications and critical corporate information from anywhere, at anytime and via any mobile device.
Diversinet is headquartered in Toronto, Canada, with offices in Fremont, California; Hong Kong; and London, England. For more information, visit www.diversinet.com.
About Caradas, Inc.
Caradas, Inc. is a credential management platform provider to the financial services industry. Caradas offers the Caradas Connexus(tm) Platform along with a full suite of planning, implementation, integration, test, and training services necessary to effectively implement a multi-application smart card program. Caradas is headquartered in Braintree MA, hosts Caradas Labs(tm), an independent test lab in Burlington MA, and has regional offices in the San Francisco and Washington DC areas. Caradas team members are acknowledged thought leaders and experts in applying smart card and security technologies to financial services, retail, and government applications. For additional information, visit the Caradas website at www.caradas.com.