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Peter A. Sokoloff & Co. regularly analyzes transactions which occur within the industries covered. An archive of these case studies is kept online as a courtesy to our colleagues. To receive by e-mail new case studies as they are prepared, please e-mail bwalko@sokoloffco.com with your contact information.

Archives > Transaction Case Study #10

Viisage Acquires SecuriMetrics

Dear Colleague, 

Viisage Technology, Inc.(NASDAQ: VISG) announced the completion of the acquisition of privately-held SecuriMetrics, Inc. The original announcement was on February 6, 2006 and the transaction was completed two weeks later. 

Viisage, $70 million in revenue, paid $28 million in cash for SecuriMetrics, net of the $2 million in cash on the acquired company's balance sheet. SecuriMetrics shareholders have the opportunity to earn up to an additional $13 million in consideration if key performance thresholds and contingencies are reached (earnout), of which $11.5 million would be paid in shares of Viisage common stock at a fixed price of $17.69 per share, which is less than the current price of $18.55. 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. 

Viisage’s share price did not change significantly after the announcement. It should be noted that on January 12, 2006, Viisage announced that the company had entered into a definitive agreement to merge in an all stock transaction with Identix Inc.  At that time, the price per share rose from $16.70 to $19.01 at the close of trading on February 13, 2006.  This was a 13.8% increase in value.   

SecuriMetrics is expected to add approximately $15 million in revenue in 2006 and $3 million in EBITDA to Viisage who paid (without the earnout) 9.33x projected EBITDA and 1.87x projected revenue.  The earnout is tied to 2006 revenue and EBITDA being met as projected.  The multiples would then increase to 13.67x on projected EBITDA and 2.73x on projected revenue if the performance thresholds were fully reached.   

Viisage delivers identity solutions for governments, law enforcement agencies and businesses including credentials such as passports and drivers' licenses. SecuriMetrics is a provider of full-function handheld iris recognition and multi-modal biometric devices, software applications and services.  Together with the completion of the pending Identix merger, Viisage will be a manufacturer of a full range of handheld and multi-modal biometric recognition solutions encompassing iris, finger and face.  

Robert V. LaPenta, chairman of the board of Viisage said, "This complementary technology better positions both companies to vie for an even greater share of the biometrics market, particularly among military applications, civil and consumer identification programs."  

Greg Peterson, founder and CEO of SecuriMetrics, Inc. said, "Our companies share a common vision of providing the most advanced, rapid and highly scalable methods for securing and protecting personal identities and assets and I am confident that together we will achieve our vision." 

We hope that you find this feature from Sokoloff & Co. interesting, informative and useful.  We welcome your comments and suggestions.

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