Viisage to Acquire Leading Iris Recognition Company SecuriMetrics, Creating the Industry's Only U.S.-Based Finger, Face and Iris
February 06 2006 - 3:00AM
Business Wire
Viisage Technology, Inc. (Nasdaq:VISG) today announced that it has
agreed to acquire privately-held SecuriMetrics, Inc., the
manufacturer of the world's only full-function handheld iris
recognition and multi-modal biometric devices, software
applications and services. With this acquisition, and the
completion of the pending Identix merger, Viisage will become the
only U.S.-based manufacturer of a full range of handheld and
multi-modal biometric recognition solutions encompassing iris,
finger and face. Under the terms of the transaction, Viisage will
pay $28 million in cash, net of the $2 million in cash on the
acquired company's balance sheet. The acquisition agreement
provides SecuriMetrics shareholders with the opportunity to earn up
to an additional $13 million in consideration if key performance
thresholds and contingencies are reached, of which $11.5 million
would be paid in shares of Viisage common stock at a fixed price of
$17.69 per share. The cash portion of the purchase price is being
funded from the initial $100 million investment that L-1 Investment
Partners made in Viisage in 2005. Robert V. LaPenta, Chairman of
the Board of Viisage said, "Iris-based recognition technologies are
poised for growth as a highly accurate and mobile option for
biometric identification. SecuriMetrics has both a unique set of
products and services, as well as deep customer relationships at
the local, state, federal and international level." Full Range of
Iris Recognition Solutions Iris recognition is a fast, accurate,
and highly scalable biometric recognition technology and is a
strong complement to finger and face recognition approaches.
SecuriMetrics offers a full suite of hardware, software and
services required to capture, encode, transmit and establish
identity based on iris patterns. SecuriMetrics identity products
are particularly well-suited for harsh physical environments,
offering a simple to use and highly portable solution that is ideal
for quickly and accurately identifying individuals in handheld
military applications and field deployments. SecuriMetrics offers
the PIER (Portable Iris Enrollment & Recognition) device that
stores up to 200,000 individual iris images and can perform
searches and return results to an operator. Nearly 2,000 PIER
devices are deployed today throughout Iraq, Afghanistan, Pakistan,
Cuba, Bosnia and other areas of conflict. U.S. detention centers in
Iraq and Afghanistan also use this device to manage detainees.
SecuriMetrics hardware and software solutions are also used to
secure physical assets (such as buildings and bases), provide
positive inmate identification, and screen for insurgents against
"watch lists." Another major area of technology innovation in final
testing today is the HIIDE (Handheld Interagency Identity Detection
Equipment), the first and only portable multi-modal device in the
world that will be capable of collection and identification of
subjects using iris, finger and face recognitions. "Our industry is
ready for rapid expansion and this consolidation onto the Viisage
platform is just the catalyst needed to accelerate the deployment
and widespread use of iris recognition technologies," said Greg
Peterson, Founder and CEO of SecuriMetrics, Inc. "We are extremely
excited about collaborating on a shared vision to improve security
through an advanced set of identity solutions." Customer Synergies
at the Local, State, Federal and International Level Similar to its
use of Viisage products, the U.S. Government uses SecuriMetrics
products in support of national security and homeland defense
across various federal agencies. "We believe that the use of
biometrics in the War on Terror, specifically iris recognition,
could help prevent another 9/11 from happening," said Lieutenant
Colonel Kathy De Bolt, U.S. Army Battle Laboratory in Fort
Huachuca, AZ. "SecuriMetrics' handheld device allows flexibility of
use on the battlefield and provides a level of accuracy we have not
seen before with biometrics. If the use of these devices can save
just one life, we will have received benefit from our investment.
Our goal is to use them to save many lives and win the War on
Terror." In addition to military applications, integrated
biometrics are of particular importance for government initiatives,
such as the U.S. Registered Traveler program that allows air
passengers greater conveniences at airport security checkpoints in
exchange for submitting to a background check and providing
personal biometric data. Other opportunities exist for the combined
company within state and local law enforcement agencies, as well as
public and private correctional facilities. "More and more
organizations are requiring seamlessly integrated biometric
solutions -- finger, face and iris -- and this acquisition will
solidify Viisage as the new standard for identity solutions," said
Bernard Bailey, CEO of Viisage Technology. "Technological advances
required to maintain this high standard will continue, fueled by
our development team that will represent one of the most qualified
and largest group of finger, face and iris recognition experts in
the world." The transaction is expected to close by the end of
February 2006 and is subject to customary closing conditions. It is
expected to add approximately $15 million in revenue in 2006 and $3
million in EBITDA. Holders of a majority of SecuriMetrics preferred
and common stock have agreed to vote in favor of the acquisition.
Viisage will hold a conference call for investors and the media
today to discuss this acquisition beginning at 11:30 a.m. EST. The
dial-in number for the call is 800-659-2037, confirmation code
79924314. Internationally, please dial 617-614-2713, using the same
confirmation code. To access a live webcast, please go to the
Investor Relations section at www.Viisage.com at least 10 minutes
prior to the start of the call and follow the directions. A replay
of the webcast will be available on the Viisage Web site beginning
one hour after completion of the call. EBITDA Viisage uses EBITDA
as a non-GAAP financial performance measurement. EBITDA is
calculated by adding back to net income (loss) interest, taxes,
depreciation and amortization. EBITDA is provided to investors to
complement results provided in accordance with GAAP, as management
believes the measures help illustrate underlying operating trends
in the Company's business and uses the measures to establish
internal budgets and goals, manage the business, and evaluate
performance. EBITDA should not be considered in isolation or as a
substitute for comparable measures calculated and presented in
accordance with GAAP. Viisage has not provided a quantitative
reconciliation of EBITDA with projected net income (loss) because
such reconciliation cannot be provided without unreasonable
efforts. About Viisage Technology, Inc. Viisage (NASDAQ:VISG)
delivers advanced technology identity solutions for governments,
law enforcement agencies and businesses concerned with enhancing
security, reducing identity theft, and protecting personal privacy.
Viisage solutions include secure credentials such as passports and
drivers' licenses, biometric technologies for uniquely linking
individuals to those credentials, and credential authentication
technologies to ensure the documents are valid before individuals
are allowed to cross borders, gain access to finances, or granted
other privileges. With over 3,000 installations worldwide,
Viisage's identity solutions stand out as a result of the Company's
industry-leading technology and unique understanding of customer
needs. Viisage's product suite includes FaceTOOLS(R) SDK, Viisage
PROOF(TM), FaceEXPLORER(R), iA-thenticate(R), BorderGuard(R),
FacePASS(TM) and FaceFINDER(R). This news release contains
forward-looking statements that involve risks and uncertainties.
Forward-looking statements in this document and those made from
time to time by Viisage through its senior management are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
reflect the Company's current views with respect to the future
events or financial performance discussed in this release, based on
management's beliefs and assumptions and information currently
available. When used, the words "believe", "anticipate",
"estimate", "project", "should", "expect", "plan", "assume" and
similar expressions that do not relate solely to historical matters
identify forward-looking statements. Forward-looking statements
concerning future plans or results are necessarily only estimates
and actual results could differ materially from expectations.
Certain factors that could cause or contribute to such differences
include, among other things, in particular, the size and timing of
contract awards, performance on contracts, performance of acquired
companies, availability and cost of key components, unanticipated
results from audits of the financial results of the Company and
acquired companies, changing interpretations of generally accepted
accounting principles, outcomes of government reviews, developments
with respect to litigation to which we are a party, potential
fluctuations in quarterly results, dependence on large contracts
and a limited number of customers, lengthy sales and implementation
cycles, market acceptance of new or enhanced products and services,
proprietary technology and changing competitive conditions, system
performance, management of growth, dependence on key personnel,
ability to obtain project financing, general economic and political
conditions and other factors affecting spending by customers, and
the unpredictable nature of working with government agencies. In
addition, such risks and uncertainties include, among others, the
following risks: that the merger with Identix will not close, that
the regulatory or shareholder approval will not be obtained, that
the closing will be delayed, that customers and partners will not
react favorably to the merger, integration risks, the risk that the
combined companies may be unable to achieve cost-cutting synergies,
and other risks described in Viisage's and Identix' Securities and
Exchange Commission filings, including the Registration Statement
on Form S-4 to be filed with the SEC in connection with the
transaction, Viisage's Annual Report on Form 10-K for the year
ended December 31, 2004 and its Quarterly Reports on Form 10-Q for
the quarters ended April 3, 2005, July 3, 2005 and October 2, 2005
under the captions "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and
Identix' Annual Report on Form 10-K for the year ended June 30,
2005 and its Quarterly Report on Form 10-Q for the quarter ended
September 30, 2005 under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations." Viisage and Identix expressly disclaim any
obligation to update any forward-looking statements. PIER and HIIDE
are currently under review for trademark registration. Additional
Information and Where to Find It Investors and security holders of
both Viisage and Identix are advised to read the joint proxy
statement/prospectus regarding the business combination transaction
referred to in the material below, when it becomes available,
because it will contain important information. Viisage and Identix
expect to mail a joint proxy statement/prospectus about the
transaction to their respective stockholders. This joint proxy
statement/prospectus will be filed with the Securities and Exchange
Commission by both companies. Investors and security holders may
obtain a free copy of the joint proxy statement/prospectus and
other documents filed by the companies at the Securities and
Exchange Commission's web site at http://www.sec.gov. The joint
proxy statement/prospectus and such other documents may also be
obtained from Viisage or Identix by directing such requests to the
companies. Participants In Solicitation Viisage, Identix and their
respective directors and executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies in respect of the merger. Information
concerning Viisage's participants is set forth in the proxy
statement dated, November 21, 2005, for Viisage's special meeting
of shareholders held on December 16, 2005 as filed with the SEC on
Schedule 14A. Information concerning Identix' participants is set
forth in the proxy statement, dated October 6, 2005, for Identix'
2005 annual meeting of shareholders as filed with the SEC on
Schedule 14A. Additional information regarding the interests of
participants of Viisage and Identix in the solicitation of proxies
in respect of the merger will be included in the registration
statement and joint proxy statement/prospectus to be filed with the
SEC.
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