Business News
L-1 Identity Solutions Acquisition of ID Systems Business of Digimarc Corporation Remains in Effect; Gains Hart-Scott-Rodino Approval
Monday 23. June 2008 - L-1 Identity Solutions (NYSE:ID), a leading provider to the acquisition of the ID Systems business of Digimarc Corporation by L-1.
The early termination of the HSR review removes a closing condition of the proposed acquisition. The transaction is subject to customary regulatory approvals and other closing conditions, including approval by Digimarc stockholders at the stockholder meeting and the spin-off of the digital watermarking business. The acquisition has been approved by the respective Boards of Directors of both companies.
Today, Digimarc announced that it received a conditional, non-binding proposal for the acquisition of the ID Systems business from Safran, a Paris-based company with significant ownership by the French government. Digimarc also announced that its Board of Directors has not revoked its recommendation that stockholders adopt and approve its pending transaction with L-1. Under L-1’s definitive merger agreement with Digimarc, which remains in effect, Digimarc is not entitled to terminate the agreement to enter into a different transaction unless Digimarc’s Board of Directors declares a competing proposal a “superior proposal” and provides L-1 with a five business day negotiation right, after which the Digimarc Board must determine that any such competing proposal continues to constitute a “superior proposal” after taking into account any changes to the terms of L-1’s offer. None of these events have occurred. L-1 believes that its transaction provides superior value to Digimarc’s stockholders as compared to the non-binding, conditional Safran proposal. If and when L-1 receives a formal “superior proposal” notice from Digimarc’s Board of Directors, L-1 will consider its response.
“We believe that our offer is superior and that the best interests of customers and Digimarc shareholders are best served with a U.S.-based company such as ours that has the strongest biometric and authentication technologies and services in the industry,” said Robert V. LaPenta, Chairman and CEO of L-1 Identity Solutions. “Placing the credentialing of U.S. citizens in the hands of a foreign entity calls to question many potential dangers, including concerns of national security. I am certain that the federal government, particularly with the anticipated implementation of the REAL ID initiative, will not prefer to place U.S. citizens’ personal information and the issuance of their credentials in the hands of a company outside of our national borders, particularly one that is more than 30% owned and controlled by the French Government.”
Safran’s non-binding proposal is conditional and subject to due diligence, written confirmation from the Committee on Foreign Investment in the United States of successful completion of the review process under the Exon-Florio Amendment to the Defense Production Act of 1950, as amended and negotiation of a definitive agreement.
On March 24, 2008, L-1 and Digimarc first announced that they had entered into a definitive agreement that would blend complementary expertise to provide more secure and cost effective credentialing solutions for customers worldwide.