Californian identity management outfit ActivCard is to acquire a 38% stake in London-based banking security software and consultancy firm Aspace Solutions for £1 million.
As part of the deal, ActivCard will supply a £2.5 million convertible loan facility to Aspace. The loan bears interest at six per cent per annum and is convertible into newly issued common shares of Aspace if unpaid on the two-year anniversary.
Aspace was launched in the UK in July 2001 with the aim of delivering multi-channel authentication and authorisation products, and e-finance consultancy services to smaller banks and building societies. Cheshire Building Society is the only firm to have gone public about plans to install Aspace's 4Tress single sign-on software security system.
News of the investment came as ActivCard reported second quarter revenues of $9.5 million, (Q2 2002: $9.6 million) and a net loss of $10.2 million compared to a net loss of $4.7 million in the corresponding period last year. Losses include a $3.7 million charge against the company's decisions to discontinue its biometric hardware product lines by transitioning to third party reselling; to terminate the hosting of PKI certificate issuance; and to eliminate overlapping ActivCard solutions by converging products and replacing royalty bearing third party software code.
Describing the earnings figures as "disappointing", Steven Humphreys, CEO and chairman of ActivCard points to the investment in Aspace as a sign of the company's determination to continue to invest in its core markets.
"It also reaffirms our focus on the European financial services market, in addition to our proven strength in the US government," he adds.