By Erin Joyce
Two hot players in biometric technology are merging their face and fingerprint recognition companies as demand for their security products grows.
Identix Incorporated, which makes fingerprint recognition technology, and face recognition company Visionics, said they would merge in an all-stock transaction which they valued at around $600 million, including options and warrants.
The deal would create a company better equipped to respond to the growing demand for biometric products across a number of industry verticals, as demand for recognition security based on physical characteristics grows in the aftermath of September 11.
Identix, based in Los Gatos, Calif., makes biometric software and hardware devices that help clients control physical access, safeguard information and prevent fraud. Since 1982 when it was founded, Identix has built a base of business among government agencies and the banking industry especially, which use its fingerprint-recognition products for access control. The company also provides consulting services to clients on security design.
The Jersey City, NJ-based Visionics makes face recognition and imaging technology and has become a stock of keen interest in the aftermath of the terrorist attacks in New York City and Washington D.C.
Although dubbed a merger of equals, Identix shareholders will have a slight ownership majority of 52.4 percent of the merged company under the deal structure and Visionics' shareholders will own approximately 47.6 percent. Barrons Online - This Weeks Magazine::
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The companies said Identix, which closed at $6.95 on the Nasdaq Friday, would exchange 1.3436 of its shares for each of the outstanding 28.8 million Visionics shares.
Based on Friday's closing prices, and on the common stock part fo the deal's structure, the merger is valued at around $269 million.
Once the merger is complete, Robert McCashin, the current chairman and CEO of Identix, is slated to become chairman of the new company. Dr. Joseph Atick, current chairman and CEO of Visionics, is to serve as the merged company's CEO.
Jim Scullion, president and COO of Identix, and Erik Prusch, CFO of Identix, are expected to assume their same positions in the new company.
Identix chairman and CEO Robert McCashin said the value of the strategic combination lies not only in how quickly the merged company can respond now but for the future of biometrics.
"This is a defining event for our industry and I am confident that this merger of what can only be described as the best-of-breed biometric technology providers, has the potential to propel us to new heights," he said.
In addition, he said the combination puts the merged company in a position to target a range of markets and industry verticals with its face and fingerprint-recognition products, especially in airports, among law enforcement agencies, healthcare and in the financial services industry.
Identix also brings to the marriage strategic relationships with key system integrators and tech companies including EDS, Raytheon, Motorola, ADT, VeriSign, IBM and Microsoft.
Shares of Identix were trading up by over 11 percent percent at $7.73 during Monday's early going on the Nasdaq. Visionics was off 20 cents to $10.30 on the first trading session after the deal was announced.
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