3M has entered into agreements to sell its Identity Management Business for $850 million to Netherlands-based Gemalto, a global provider of digital security. 3M’s Identity Management Business comprises 3M Cogent Inc., which provides a full spectrum of biometric solutions with a focus in civil identification, border control and law enforcement, and 3M’s Document Reader and Secure Materials Businesses.
Headquartered in the U.S. and present on three continents, 3M’s Identity Management Business partners with governments, law enforcement, border control and civil identification bodies worldwide. It offers biometric based end-to-end solutions enabling identity verification and user-friendly authentication. Annual revenue of 3M’s Identity Management Business is approximately $215 million and profit from operations is $58 million.
As Gemalto pursues its expansion and prepares for the future, this acquisition both completes Gemalto Government Programs offer by in-sourcing biometric technology and ideally positions the company to provide solutions for the promising commercial biometrics market, the company reported in a press release. Combining market access and technologies from 3M’s Identity Management Business and Gemalto will allow trusted national identities and strong biometric authentication to develop throughout the digital economy.
Once the acquisition is completed, 3M’s Identity Management Business will become part of Gemalto Government Programs business.
The closing of the transaction is expected to occur in the first half of 2017, after approval from the relevant regulatory and anti-trust authorities and employee consultation where required. After the acquisition is completed, Gemalto reported it will retain a strong financial structure with a net debt/adjusted EBITDA ratio below 1.5. The transaction will be accretive to adjusted earnings per share.
“Gemalto is delighted to welcome new members to its international team. 3M’s Identity Management Business and Gemalto perfectly fit, solving authentication and identity management pain points across our customer segments, creating immediate increased differentiation and offering additional long term growth perspectives,” said Philippe Vallee, Gemalto CEO.