Safran To Acquire L-1 Identity Solutions For $1.09 Billion
Safran announced recently that it has entered into a definitive agreement with L-1 Identity Solutions, a identity management provider in the United States, for Safran to acquire the operating and holding company of L-1 and its biometric and enterprise access solutions, secure credentialing solutions and enrollment services businesses, for a total cash amount of $1.09 billion.
These businesses had 2009 revenue of $436 million and recorded a backlog of $1.1 billion at end of 2009. The transaction would create an provider of solutions for the fast-growing high-tech homeland security market and generate strong growth in revenue and earnings, while yielding significant operating synergies.
Prior to this agreement and as a condition to the transaction, L-1 entered into a definitive agreement to sell its government consulting services business for $295 million to a third party, and therefore this business would be excluded from the transaction with Safran.
Following the closing, Safran intends to operate L-1 as part of its existing security business, Morpho, in accordance with U.S. national security regulation, to create a provider of solutions for high tech homeland security.
Jean-Paul Herteman, CEO of Safran, said: "I have a deep respect for L-1's business and its contribution to the security industry. We are all highly impressed with the quality and expertise of L-1's teams throughout the United States and we are looking forward to working with them to bring L-1 and Morpho together.
“This will allow us to grow L-1's business, while expanding the reach of L-1's services to other key territories around the world. With this acquisition, Safran's pro forma 2011 revenues from its security business, focused on detection, biometrics and identity management is likely to exceed 15 percent of the Safran's global revenue. The expected organic growth of these activities should enable the group to reach its 20 percent revenue target for its security business swiftly. Furthermore, this constitutes a significant step in the implementation of Safran's clearly defined strategy to be a leader in the field of mission critical high tech tier one players in the group's three businesses: Aerospace, Defense and Security."
"I am extremely proud of L-1's accomplishments and the role we have played in the development of multi-modal biometric technologies and in helping establish the identity management market over the last four years," said Robert V. LaPenta, chairman, president and CEO of L-1 Identity Solutions. "Safran will provide a strong global reach and a more comprehensive portfolio of solutions and services in order to leverage the industry's best set of collective experience and solutions, all to the benefit of our customers and partners worldwide. Safran's commitment to furthering the standards of quality and excellence in engineering innovation will ensure that we can continue to lead the market in developing superior identity management solutions."