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VeriSign Acquires R4 Global Solutions
The company that will manage the EPCglobal Object Name Service buys RFID systems integrator R4 Global Solutions for $15 million.
May 18, 2005—VeriSign, the Mountain View, Calif., company that will manage the EPCglobal Object Name Service, has acquired RFID systems integrator R4 Global Solutions for $15 million in cash.
The deal provides VeriSign with R4's relationships with a number of key companies already deploying radio frequency identification, and it brings R4 the reach and financial backing of a company that had $1.8 billion in revenue last year.
"This deal gives VeriSign an early relationship with customers deploying RFID. It also reaffirms VeriSign's investment in RFID and expands it beyond ONS and data management to whole solutions," says Brian Matthews, vice president of VeriSign Directory Services.
R4 Global Solutions' RFID clients include such major companies as Levi Strauss & Co., McKesson and Land O'Lakes. In a recent survey of systems integrators used to help companies meet Wal-Mart's RFID mandates, technology investment company Incucomm estimated that R4 had won 14 percent of the systems integration contracts awarded by the initial 137 Wal-Mart suppliers involved.
R4 maintains that many of its clients are moving toward RFID deployments that are more sophisticated than just tagging shipments. Those applications include cross-docking, cold chain (the storage and transportation of refrigerated goods) and electronic pedigree.
R4 currently has 26 full-time employees and offices in San Francisco, Dallas, Boston and Atlanta. VeriSign says it plans to expand R4's reach outside the U.S. and add more staff.
VeriSign claims that the ability to now offer its own consultant services, via R4, will support VeriSign's existing business but won't put it into direct competition with larger companies offering RFID services. R4 is already planning to bid jointly with a larger services firm for upcoming DOD contracts for RFID services.
"There is a lot of cross-pollination between service companies [within the RFID market]," says Richards.
VeriSign's acquisition of R4 mirrors the company's earlier move into the managed network security services for companies looking to hand over management of their corporate network security market when in 2001 it acquired privately held consulting operation Exault Internet Security to kick-start its network security offerings.
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