said before the market opened Thursday that it will sell 85% of its Network Solutions business to Pivotal Private Equity for $60 million in cash and a $40 million senior subordinated note. The company will retain a 15% equity stake in Network Solutions, which it acquired in 2000.
Mountain View, Calif.-based VeriSign will also retain the Internet registry business of Network Solutions, which is the address directory for the Web sites ending in .com and .net and handles more than 10 billion interactions per day.
VeriSign Chairman and CEO Stratton Sclavos said in a statement that the sale, which had been suggested by some analysts, will enable the company to focus exclusively on its Internet and telecommunications infrastructure business.
The Network Solutions business of selling domain names recorded $59 million in revenue in the second quarter and ended the period with 8.6 million active domain names under management, down from 8.9 million at the end of the first quarter.
That domain name registrar business has been suffering as fewer customers and speculators who bought domain names during the dot-com bubble renew their registrations.
Under its registry business, however, VeriSign will still draw some revenue from new domain name registrations. Through that business, the company recently launched a controversial service called Site Finder that redirected Internet surfers who typed in incorrect addresses to a VeriSign search engine that included results from paid advertisers. At the request of the Internet Corporation for Assigned Names and Numbers, VeriSign temporarily suspended that service earlier this month.
Shares of VeriSign rose 29 cents, or 2%, to $15.09 in recent trading.