Gemalto to Acquire 3M’s Identity Management Business
Transaction includes 3M Cogent Inc., Document Reader and Secure Materials Businesses
AMSTERDAM, Dec 9, 2016
– (ACN Newswire) – Gemalto (Euronext NL0000400653 – GTO), the world
leader in digital security, today announced that it has entered into
agreements to acquire 3M’s Identity Management Business for US$850
million. 3M’s Identity Management Business is comprised of 3M Cogent
Inc., which provides a full spectrum of biometric solutions with a focus
in civil identification, border control and law enforcement, and 3M’s
Document Reader and Secure Materials Businesses.
Headquartered in
the United States and present on 3 continents, 3M’s Identity Management
Business is a trusted partner to governments, law enforcement, border
control and civil identification bodies worldwide. It offers world-class
biometric based end-to-end solutions enabling identity verification and
user-friendly authentication. 3M’s Identity Management experienced and
highly-skilled team of approximately 450 experts has developed proven
biometrics algorithms (finger, face, iris, etc.) and is at the forefront
of innovation with the latest multi-modal biometric solutions. Annual
revenue of the business is approximately US$215M and profit from
operations at US$58M[1].
As Gemalto pursues its expansion and
prepares for the future, this acquisition both completes Gemalto
Government Programs offer by in-sourcing biometric technology and
ideally positions the Company to provide solutions for the promising
commercial biometrics market. Our combined offers and experience in the
Public sector to manage the enrolment, identification of individuals,
flow of passengers and border control should contribute to stronger
national security. On the commercial side, as online and mobile
transactions grow, new forms of multi-factor authentication and
identification are needed to complement physical ID documents. Combining
market access and technologies from 3M’s Identity Management Business
and Gemalto will allow trusted national identities and strong biometric
authentication to develop throughout the digital economy.
Once
the acquisition is completed, 3M’s Identity Management Business will
become part of Gemalto Government Programs business which recorded a
revenue of EUR 391 million in 2015.
The closing of the
transaction is expected to occur in the first half of 2017, after
approval from the relevant regulatory and anti-trust authorities and
employee consultation where required. After the acquisition is
completed, Gemalto will retain a strong financial structure with a net
debt/adjusted EBITDA ratio below 1.5. The transaction will be accretive
to adjusted Earnings Per Share. As part of our long term strategy and
the development of this core technology across our businesses, the
acquired business revenue is expected to grow at +10% CAGR with EBITDA
margins above 20% by 2020.
“Gemalto is delighted to welcome new
members to its international team. 3M’s Identity Management Business and
Gemalto perfectly fit, solving authentication and identity management
pain points across our customer segments, creating immediate increased
differentiation and offering additional long term growth perspectives”,
said Philippe Vallee, Gemalto CEO.
[1] Source: Proforma carve-out unaudited financials based on due diligence – 12 months ending June 2016
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