Safran and BAE Systems to Buy L-1 Identity Solutions
This is actually a three-way deal with U.K-based BAE Systems -- another global defense, security and aerospace company -- buying L-1's government security consulting services for nearly $296 million. Safran, whose core businesses are in aerospace, defense and security, is acquiring L-1's biometric business.
The deal, which has been approved by Safran and L-1 boards, will result in significant operating synergies of around $30 million, Safran said, which will be realized within 18 months of closing the deal. L-1 said the BAE Systems transaction, which is subject to certain U.S. regulatory approvals, is expected to close in the fourth quarter of 2010. It expects the deal with Safran to close by the first quarter 2011.
"Safran intends to operate L-1 as part of its existing security business, Morpho, in accordance with U.S. national security regulation, to create an industry-leading provider of solutions for high-tech homeland security," Safran said in a statement.
"I have a deep respect for L-1's business and its contribution to the security industry," Safran CEO Jean-Paul Herteman said. "[W]e are looking forward to working with them to bring L-1 and Morpho together. This will allow us to grow L-1's business, while expanding the reach of L-1's services to other key territories around the world."
President and CEO of L-1 Robert LaPenta added, "Safran will provide a strong global reach and a more comprehensive portfolio of solutions and services in order to leverage the industry's best set of collective experience and solutions."
L-1, which put itself up for sale in January and was courted by several companies, sells face-recognition, iris, finger print and other biometric products to government agencies and to financial institutions. The use of biometrics has increased and moved also to mobile applications. As defense budgets were cut, large companies looked for ways to expand, and the the market for smaller defense firms offering more specialized solutions has heated up.