Idemia sale launch close, biometrics and digital ID business may be separated: report
The rumored sale of Idemia by Advent International is about to launch, sources have told Reuters, raising the possibility that one of the world’s largest biometric technology-makers and digital identity providers will have new owners this year.
Reports of a prospective sale or corporate split began to circulate in February, and a June rumor set the expectation that a deal could be made this year.
Advent has chosen Goldman Sachs and Rothschild to conduct the sale, and they are expected to launch it in the immediate future.
The sources told Reuters that Idemia’s biometrics and digital ID business is prized, and could be bid on separately from the company’s other divisions.
A rough price estimate of 3 billion Euros (US$2.98 billion) for the biometrics and ID business is mentioned, plus another €1 billion for its SIM card business. No precise valuation has been completed as of yet.
The prospective sale is set to begin against the backdrop of year-to-date losses of 25 percent by the Nasdaq and 30 percent by the STOXX Europe 600 Technology Index. Reuters also suggests that higher interest rates tend to make tech companies less appealing to investors.
Any deal would likely require government clearance, but may not pose a barrier, Reuters’ sources said.
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Article Topics
acquisitions | Advent International | biometrics | digital ID | IDEMIA
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Why did Advent International buy the associated businesses and formed IDEMIA?
OK, Who is Advent International?
A private company listed on Yahoo.Finance/crunchbase working as:
Categories: Finance, Financial Services, Venture Capital
Founded Date:1984; Founders: H. Haight; Number of Employees: 251-500.
Basically, a venture capital company doing a venture in the biometrics id market. Clearly not knowing the history of the very uninteresting landscape in this market – examples are in abundance: Pay-by-Touch scam, L1-ID total venture and market failure, way back when! Motorola venture, IBM venture into biometrics, Lockheed Martin venture, Unisys, SIAC, Northrop, Siemens, T-Systems even CSC, there are more, every single one failed!
Definition of “failed” is very simple, the investments did not make any returns. All started with lots of hoopla, amazing looking business plans and power point pitches with one common theme. The folks leading the ventures did not know anything about the biometrics id technology, and more importantly the biometrics id customers!
“Build it, and they will come.” Sure, baseball is in our DNA, the customer DNA. So, of course it makes sense. But do these folks have any ideas about the biometrics id customer DNA? I say or the actual experience says zilch! Just look at the current executive ranks managing IDEMIA resumes.
So, Advent spent about $2B and after five years likes to get $4B. Good luck. It will not happen.
The best scenario will be to spin the two segments out, help the buy out management group to finance the spin off and take this bad-decision burden off your and your anxious investors shoulders! You don’t need Goldman and Rothschild additional overhead and cost to get rid of IDEMIA. The best you can do in the spinoff is to get 20% margin to cover your five years of cost and pain.
By the way, getting government and anti-trust courts approval will be a huge obstacle – may be pushing it here in USA and getting it by force, but European Union courts will never allow this – say for a company like Thales to acquire IDEMIA.
Ben Bavarian is a biometrics industry expert, He has been directly involved with two IPO, and almost every large merger and acquisitions in the biometrics id market since 1995. You may reach him at ben.bavarian@abisandbiometrics.com.