Viisage (NASDAQ:VISG)
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First Planned Acquisition with L-1 Investment Partners to Add
Leading Fingerprint Technology Solution Provider to Viisage Portfolio
and Further Viisage Market Penetration
Viisage (Nasdaq: VISG) announced today the intention to acquire
Nashville, Tennessee-based Integrated Biometric Technology (IBT), a
leader in providing fingerprinting products, services and solutions to
government, civil, and commercial customers that require criminal
background checks and screening. This is the first proposed
acquisition for Viisage, a leading provider of advanced technology
identity solutions, since the announced investment in Viisage by L-1
Investment Partners, LLC of Stamford, Connecticut. The IBT proprietary
fingerprint technology and background screening solutions will be
offered as part of the Viisage portfolio of identity solution products
and are important elements in the Viisage vision of offering an
end-to-end solution for securing and managing personal identities. The
IBT solutions also are expected to allow Viisage to further penetrate
existing markets and create a channel into new market opportunities.
L-1 has entered into a definitive agreement to acquire 60 percent
of the outstanding ownership interests of IBT for $35 million in cash
and has agreed to acquire the remaining 40 percent on or before
January 30th, 2006 for an additional $25 million. It is expected that
upon consummation of the L-1 investment in Viisage, anticipated in
December 2005, Viisage would acquire from IBT all outstanding stock of
IBT for five million newly-issued shares of pre-reverse split Viisage
common stock and pay L-1 $35 million in cash, thereby transferring
full ownership of IBT to Viisage. The transaction is expected to
produce revenue in the $30 to $35 million range and be accretive in
2006.
"Identity solutions that combine leading face recognition and
fingerprint solutions with high security credentialing technologies
are increasingly in demand," said Bernard Bailey, president and CEO of
Viisage. "The addition of IBT's expertise in fingerprinting solutions
to our existing identity solutions platform is expected to be a very
attractive solution for both existing and prospective customers. By
combining our two companies' valuable management resources and assets
at the Federal and State level, along with IBT's penetration into the
financial services sector, we believe we are clearly positioning
Viisage to achieve sustainable long-term growth."
IBT would add a deeper dimension to the Viisage portfolio of
solutions by automating the electronic processing of fingerprints for
criminal background checks and searches with the Federal Bureau of
Investigation's (FBI) Integrated Automated Fingerprint Identification
System (IAFIS). IBT also provides this leading fingerprinting solution
to the banking, education and securities industries.
IBT's proprietary software and processes have revolutionized
livescan fingerprint capture, management, and transmission, and are
used to perform background screening for applicants seeking a new job
or individuals who provide services that require their identity to be
vetted. For example, pursuant to the USA PATRIOT Act, the estimated
2.7 million commercial drivers that transport hazardous materials are
required to undergo background screening. In 2004, the US
Transportation Security Administration (TSA) awarded a multi-million
dollar contract, with a potential value in excess of $100 million over
a four-year period, to IBT under which IBT has deployed a
sophisticated network of electronic fingerprint capture devices
throughout the United States to process applicants and provide
criminal background checks and screening for hazardous materials
transportation licenses in 34 states in support of the USA PATRIOT Act
mandate.
"The synergies between our goals in building the Viisage identity
solutions platform and the unique capabilities of IBT provide great
upside opportunities in the high growth identity solutions market,"
added Bob LaPenta, chairman and CEO of L-1 Investment Partners, LLC.
"IBT is an established company with a solid customer base that is
complementary to Viisage's existing customer base and offers channels
into new markets. Viisage and IBT each have a solid base of recurring
revenue, which we expect will provide for greater visibility and
stability in the businesses going forward."
IBT customers include US Federal Government agencies, state and
local governments as well as the three largest banks in the United
States, and 34 state departments of motor vehicles including
Connecticut, Delaware, North Dakota, Oklahoma, Rhode Island, and West
Virginia. Combining IBT's success with fingerprinting solutions in the
financial market with Viisage's document authentication, proofing and
credentialing solutions is expected to provide highly desirable
end-to-end identity proofing solutions for these and other
institutions that must meet strict federal regulations for vetting a
person's identity prior to granting privileges to those individuals,
such as opening a new bank account.
Charles Carroll, president and CEO of IBT, commented, "IBT
customers have benefited tremendously from our fingerprinting
solutions, which have helped with significant business issues ranging
from background checks for compliance to cost savings from fraud. We
are delighted with the plan to become part of a greater suite of
identity solutions and believe that Viisage offers the leading
solutions in the market today. The synergies provided by this
combination will enhance our product offerings as we pursue further
opportunities such as TWIC and the Registered Traveler Program."
Conference call
Viisage will host a conference call with the investment community
to discuss the IBT acquisition beginning at 3:30 p.m. ET on Tuesday,
November 15, 2005. The dial-in number for the call is 866.356.3093 and
the participant conference code is 39459658. Internationally, please
dial 617.597.5381, using the same participant conference code. The
call also will be available via live audio webcast under the
Conference Calls page of the Investors section of the Company's
website (www.viisage.com). To access the webcast, please go to the
Company's website at least 10 minutes prior to the start of the call
and follow the directions. A replay of the webcast will be available
at Viisage's website beginning an hour after completion of the call.
About Viisage
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), Viisage iA-thenticate(R),
BorderGuard(R), IdentityTOOLS(TM), IdentityEXPLORER(TM), 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. The consummation of the IBT acquisition is subject
to the completion of L-1's proposed $100 million investment in the
Company. Because this investment is subject to approval by the
shareholders of the Company and certain other closing conditions,
there can be no assurance that L-1 will consummate an investment in
the Company, and therefore that Viisage will complete the acquisition
of IBT. There also can be no assurance with respect to the timing of
the L-1 investment or the IBT acquisition or the benefits of theL-1
investment or the IBT acquisition. Certain factors that could cause or
contribute to such differences include, among other things, the
possible inability of the Company or L-1 to satisfy conditions to
closing the L-1 investment and/or the IBT acquisition, including but
not limited to the requirement that the Company's shareholders approve
the L-1 investment, the size and timing of contract awards,
performance on contracts, 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, the unpredictable nature of working with government
agencies and other risks, uncertainties and factors including those
described from time to time in Viisage's filings with the Securities
and Exchange Commission, including without limitation, Viisage's Form
10-K for the year ended December 31, 2004 and its quarterly reports on
Form 10-Q. Viisage expressly disclaims any obligation to update any
forward-looking statements.
Viisage has filed a preliminary proxy statement with the
Securities and Exchange Commission in connection with the proposed L-1
investment. Investors are urged to read such proxy statement which
contains important information. The proxy statement and other
documents filed by Viisage with the SEC are available free of charge
at the SEC's website (www.sec.gov) or from Viisage by directing a
request to investor@viisage.com, or from Viisage's website at
www.viisage.com.
Viisage and its directors, executive officers, and other employees
may be deemed to be participating in the solicitation of proxies from
Viisage stockholders in connection with the approval of the proposed
transaction. Information about Viisage's directors and executive
officers is available in Viisage's proxy statement, dated September 7,
2005, for its 2005 Special Meeting in Lieu of Annual Meeting.
Additional information about the interests of potential participants
is included in the preliminary proxy statement which Viisage has filed
with the SEC.