DNP acquires majority stake in Laxton

DNP Senior Corporate Officer Yoshiki Numano and Laxton Group CEO Lyle Laxton

Dai Nippon Printing (DNP) will acquire a majority stake in biometrics and identity systems firm Laxton Group. The Japanese conglomerate plans to take over 75 percent of the shares belonging to Rubicon SEZC, Laxton’s holding company, in July.

For DNP, this strategic partnership means expanding access to markets beyond Japan, particularly in developing nations where demand for identity products is increasing, Senior Corporate Officer at DNP Yoshiki Numano said on Tuesday, during the Identity Week conference in Amsterdam.

“This acquisition aligns with DNP’s commitment to expanding our portfolio in the technology sector, particularly in areas that promote secure and efficient identity management,” says Numano. “By integrating Laxton’s innovative solutions, we aim to boost our capabilities and extend our reach into the African market, where the demand for robust identity verification systems is rapidly growing.”

The two companies did not disclose the value of the deal.

According to Laxton Group CEO Lyle Laxton, the arrangement will add new technologies to its operations, including security printing, which is one of DNP’s specialties. It will also bring the “balance sheets and financials” to the Hague-headquartered firm, allowing it to compete for tenders against some of the biggest names in the field,  he explained in an interview with Biometric Update.

“It just rounds off all the holes that we have in our offerings and enables us to compete at the highest levels globally,” says Laxton. “We are going to be pretty much responsible for the portfolio outside of Japan and leading that.”

Laxton serves governments and organizations in around 50 countries, specializing in biometric-based national ID and voter registration enrollment and authentication hardware and software.

During previous bids, the company was forced to look outside for partners offering print and card materials. Laxton sees the partnership as a step towards becoming an end-to-end identity solution provider, catapulting it among the top four globally.

“Our longer-term view is to have everything in-house,” explains Nick Perkins, Laxton’s Chief Sales Officer. “This is a huge jump forward for us, to have capabilities for credentials, secure printing, all in-house, integrated with our software capability.”

On its side, DNP sees near-term opportunities in IC cards and card printers, while future vision involves financial Know Your Customer (KYC) and other republic sectors. A big part of that will be the DNP’s expertise in the ID business. The company holds the leading market share in Japan for security IC cards and distributes holograms, cards and card printers to over 30 countries.  Its more recent focus is digital identity platforms.

The Tokyo-based firm operates 72 factories. Laxton recounts how he single-handedly set up factories in Portugal and China with the help of his team of engineers.

“I’m an accountant, so just walking through their plants in Japan is mind-blowing,” he says.

Laxton is set to join DNP’s Smart Communication segment, its largest unit, which generated more than half of the conglomerate’s last year’s US$9.5 billion revenue.

The company, however, plans to continue with its own vision within DNP’s huge business empire, which employs over 36,890 people. The firm will retain its management and 25 percent of equity, allowing it some control.

“We’ve had lots of opportunities over the years and we could have done a deal, but we would have just been absorbed and died. Our boards had pretty big ambitions to become one of the big players in the world,” adds Laxton. “I think with them behind us, they are also going to empower us to make better products.”

From South Africa to global markets

Founded in South Africa in 2004, Laxton made its name by supplying biometric systems to African countries such as Mozambique, Zimbabwe, Ethiopia and Liberia. While Africa remains an important market, over the past 10 years, the company has been spreading to other corners of the world, including Latin America, which has become another stronghold.

In 2022, it received investment from Washington-based Enlightenment Capital. The private equity firm plans to remain Laxton’s partner and support its expansion in North America with the help of DNP. More moves from the new partners are also expected in the Asia-Pacific region.

The company provides MOSIP-compliant wares as well as products for KYC, border security and law enforcement sectors, including for the governments of Latvia and Estonia. The firm is in talks on collaboration with Interpol.

“Law enforcement is going to become a stronger focus of ours post-acquisition,” says the company’s CEO.

Laxton is also eager to introduce instant ID document issuance, which can cut costs related to logistics. Sophisticated cards can be delivered with DNP’s desktop card printers but applications such as passports still require a more centralized approach. Smaller countries and projects could see the introduction of infrastructure locally, he adds.

Article Topics

acquisitions  |  biometrics  |  Dai Nippon Printing (DNP)  |  digital ID  |  identity management  |  investment  |  Laxton