Baltimore believed to be in US link-up talks

Baltimore Technologies is believed to be in discussions which will lead to a major strategic development at the company early in the New Year.

This is likely to involve some type of strategic link with a US partner, which would pave the way to a quotation for on the Nasdaq market.

Baltimore is one of Ireland's most successful software companies, specialising in encryption software, including the technology used for the electronic signing of an agreement between President Clinton and the Taoiseach, Mr Ahern, on e-commerce earlier this year.

The company is maintaining a firm "no comment" stance on speculation about its future.

Industry sources believe that the likely route for the company lies in a link-up with a US partner. This could come by means of a strategic alliance, or through a reverse takeover under which Baltimore exchanges some of its shares as part of a merger with a US group.

Whatever route is followed, Baltimore is at the stage of development where industry experts believe it will need a substantial injection of cash to fund the further marketing and development of its range of products. Its main US competitor, Entrust, recently raised $100 million (£67 million).

Whatever route is finally chosen by Baltimore, it is expected to lead to a significant cash injection, as the company bids to move on to the next phase of development and ensure that its lead in technological development is translated into new sales and markets.

Financier Mr Dermot Desmond owns more than 60 per cent of Baltimore and company management, led by managing director Mr Fran Rooney, are also significant shareholders. The company has developed rapidly over the past two years since Mr Rooney took over.

It has annual turnover of between $7 million and $10 million and is now recognised internationally as an industry leader in a high-growth area, as the security of transactions conducted over the internet is now a major issue.