Rumored Idemia $4.6B sale could split enterprise, government business
Another major corporate change could be coming for Idemia, as its U.S. parent is considering selling the global biometrics and digital identity firm, possibly by breaking it up, according to a Reuters report.
Idemia came together in 2017 through the merger of Safran’s identity and security units, including the Morpho brand, with Oberthur Technologies. This followed Advent’s $2.7 billion acquisition of the Safran business.
Advent has approached investment banks as it considers launching an auction later in 2022, a source told Reuters. Bpifrance also has a stake in Idemia.
Now, Thales has reportedly expressed interest in acquiring assets from Idemia in a sale at a valuation of €3 billion to €4 billion (roughly US$3.4 billion to $4.6 billion), though antitrust regulations would limit which parts Thales could bid for. Thales recently confirmed its interest in adding cybersecurity assets, but denied it was in talks with Atos.
Reuters cites a study from Embroker which indicates cybercrime is up by 600 percent during the pandemic as the reasoning behind government stepping up their cyber defenses, increasing the size of one of Idemia’s target markets.
Thales is also partially controlled by the French state, and a 2018 report from the country’s government advised consolidating its cybersecurity industry.
One option would be to separately sell its government business, which is valued at €3 billion ($3.4 billion), from its enterprise divisions, which include SIM card issuance and payments platforms, and is estimated at €1 billion ($1.1 billion). Both sides currently provide biometrics, with border technology contracts and biometric payment cards as prominent examples.
The report also suggests that private equity firms are interested, but that any action is likely to occur after France’s election in April. It further cites Moody’s data indicating Idemia has a heavy debt load, but the company also booked revenues of €2.2 billion ($2.5 billion) in 2020.