Smith Groups sells its share in Cross Match for $77 Million
As part of the company’s efforts of streamlining their activities, Smiths Group opted to divest non-core activities in order to have a more active portfolio. In mid-July, Smiths Group plc announced the disposal of its minority stake in Cross Match Technologies, Inc. for $77 million. The proceeds from the sale of its biometric identification company to Francisco Partners, a private equity firm, comprise of $69 million in cash on completion and $8 million for its escrow account, to cover working capital adjustments and possible legal claims for up to 15 months.
Smiths Group purchased Heimann Systems in 2002, which included a biometrics business. Three years later, Heimann Biometrics was sold to Cross Match in exchange for equity in Cross Match. Now, as reflected in its accounts, the book value of said equity is recorded at $36 million.
Smiths Chief Executive Philip Bowman said: “We are looking to simplify our portfolio. This disposal helps us to focus on our core businesses in driving revenue growth, operational improvements, enhanced margins and strong cash conversion.”
Smiths Group is known for its practical application of technologies which are widely utilized for threat and contraband detection, medical devices, energy and communications markets around the world. They are present in over 50 countries worldwide.
Do you think it is a good decision for Smiths Group to sell its biometrics company?