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Viisage to buy biometrics rival Identix

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREGift Box shows no rust in San Antonio Stakes win at Santa Anita “This combination makes us a prime player in these programs,” said LaPenta, a longtime defense industry executive who got the chairman’s post last year after engineering a $100 million investment in Viisage. The deal calls for Identix shareholders to receive 0.473 of a new share of Viisage for each Identix share. At Wednesday’s closing price of $17.69 a share for Viisage, that would give the Identix shareholders stock worth about $8.37, or a 45 percent premium over Identix’s closing price of $5.78 on Wednesday. Identix shares rose $1.20, or 21 percent, to close at $6.98 in trading Thursday on the Nasdaq Stock Market, while Viisage shares fell $1, or 5.6 percent, to close at $16.70. While Identix shareholders will own about 59 percent of the combined company, LaPenta will become chairman and chief executive, and Viisage will have seven of the 12 seats on the board. One of Viisage’s board members is former CIA director George Tenet. Identix CEO Joseph J. Atick will become vice chairman and chief strategic officer of the combined company, which is to be based in Stamford, Conn., and likely will get a new name. The acquisition is expected to close in the year’s second quarter, subject to regulatory and shareholder approvals. Viisage and Identix bring strikingly similar financial profiles. In the 12-month period before Viisage’s last earnings report, the company lost $9.5 million on revenue of $70.3 million. In the same period, Identix lost $10.1 million on revenue of $79.9 million. In announcing the deal, the companies said their combined operations are expected to have about $220 million in revenue and at least $40 million in earnings before interest, taxes, depreciation and amortization in 2006. The new entity should be profitable by generally accepted accounting methods in the second half of this year, LaPenta said. From there, he pledged, the company can grow at more than 20 percent annually, even without future acquisitions. The technology behind biometrics – which identifies people based on personal characteristics such as the patterns in faces, fingers, eyes and voices – has existed for many years, though it has not seen huge use beyond access control in sensitive facilities. But after the attacks of Sept. 11, 2001, interest in biometrics began to take off. Now the technology is being incorporated into passports, identification cards and other government applications; analysts expect wider consumer uses to follow soon. That could include expansion of pay-by-fingerprint retail-checkout systems and biometric pads on computers to replace passwords. “Everybody’s starting to get used to biometrics now,” said Brian Ruttenbur, an analyst at Morgan Keegan & Co. who praised the rationale for the Viisage-Identix deal. LaPenta, a co-founder of defense electronics contractor L-3 Communications Holdings Inc. and a former executive at Loral Corp., said the biometrics market today reminds him of the aerospace and defense industry 30 years ago, when scores of entrepreneurial startups were clamoring for Cold War defense dollars. Ultimately, he said, many of those companies needed management help “to go to the next level,” a step he hoped to take with Thursday’s deal. He noted that aside from a few biometrics vendors, such as Cogent Systems Inc., “profit is a word that’s not associated with this space.” “I think we’re going to create a whole new paradigm in that area also,” he said. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! BOSTON – Viisage Technology Inc. is paying about $770 million in stock for rival biometrics provider Identix Inc. in hopes of creating a full-service homeland security company and grabbing a bigger chunk of a market that has blossomed since 9-11. Both companies offer facial-recognition technology, but Billerica, Mass.-based Viisage lacked Minnetonka, Minn.-based Identix’s prowess in fingerprint identification, which is the most commonly used biometric identifier. By melding their methods for facial recognition and integrating that with other biometric systems, the newly combined company expects to compete for government contracts surrounding travel security and document verification. In a conference call Thursday, Viisage Chairman Robert LaPenta cited several such programs, including the US-Visit border security project, the Registered Traveler pass for airport lines and Real ID, the national driver’s license law. last_img

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