HID reportedly paid $60m for Lumidigm
Identity solution provider HID this week made its second purchase in a month, buying fingerprint biometric provider Lumidigm.
In January, HID announced that it had purchased IdenTrust, a provider of digital identities.
The Albuquerque Journal is reporting that HID paid more than $60 million for the biometric company. Through a spokesperson HID said that because this is a "private transaction" the company would not comment on the purchase price.
I was not able to speak to Jeff Kessler at Imperial Capital about the deal. (Imperial advised Lumidigm,) but I did get a look at a research brief Kessler published on Feb. 12, where he said this deal "continues to put distance between Assa Abloy’s HID Division and the competition in the way of interoperable, identity solutions for government and enterprise users."
Here's more from Kessler's brief:
In our opinion, Assa Abloy has made a concerted effort to become the undisputed leader in higher technology access control and identification solutions for not just enterprises and institutions, but for Government as well—the latter is an area in which it did not have a lot of traction until 2011. However, a series of acquisitions have turned the company into the leader in this segment from a revenue perspective. This is unlike Safran (which purchased L-1 in 2010), which is primarily involved in registration and border identification. The challenge remains for Assa Abloy and HID to integrate these acquired technologies and companies carefully, to let some of the more creative sectors provide both competitive advantage to Assa Abloy, yet still remain the leading providers of software and identity solutions to other companies in the industry as well.
Founded in 2001 and based in Albuquerque, N.M., Lumidigm has 33 employees. Its 2014 sales are expected to be $25 million, and the deal is expected to be accretive to earnings per share, according to HID parent company ASSA ABLOY.
Common problems with fingerprint biometrics include that fact that the technology will not work in harsh environments or when peoples’ fingers are dirty. In addition, some peoples’ fingerprints are simply not detectable. Lumidigm’s technology overcomes these problems, HID said, with its patented “multispectral imaging technology [that] uses multiple light spectrums and advanced polarization techniques to extract unique fingerprint characteristics from both the surface and subsurface of the skin.” The technology is also highly effective in detecting “imposter or ‘spoof’ fingerprints,” according to HID.
Lumidigm’s products are used in verticals such as banking, healthcare, entertainment, and government services. HID is also interested in Lumidigm’s “premier global customer base,” HID CEO Denis Hebert said in a prepared statement.
The opportunity for HID, according to a statement from Bob Harbour, executive chairman of Lumidigm is: “to apply multispectral imaging capabilities to credential acquisition and authentication, gesture recognition, and other image-based process control systems, making multi-factor authentication on a single, integrated device a reality.”