Viisage (NASDAQ:VISG)
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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.