Tumbleweed And Valicert Announce Merger Agreement

Tumbleweed Communications, which supplies secure messaging applications, has signed a definitive merger agreement with software security provider Valicert. The market value of the transaction is approximately $14.3 million. Pending shareholder and regulatory approvals, Tumbleweed will acquire all of the outstanding shares of Valicert in a stock-for-stock transaction. As approved by the Boards of Directors of each company, the merger calls for each share of Valicert common stock to be exchanged for 0.385 shares of Tumbleweed common stock, or approximately 9.8 million shares, which will represent approximately 24 per cent of Tumbleweed’s outstanding stock post merger. The purchase transaction is expected to close in the second or third quarter of 2003, while the merged enterprise expects to achieve operating profitability on a combined basis in the fourth quarter of 2003.

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