L-1 Acquired by Safran and BAE in $1.6B Merger Deal
L-1 Identity Solutions, a Stamford, CT-based maker of biometric technologies for security and identification, said today it has agreed to be acquired by French aerospace and defense company Safran for $12 per share in a merger transaction. As part of the deal, L-1 is first selling off a chunk of its business to U.K.-based BAE Systems.
L-1 (NYSE: ID) said the overall transaction is worth $1.6 billion—which includes the company’s outstanding debt—and is subject to closing conditions such as stockholder approval, an anti-trust review, and a review by the U.S. Committee on Foreign Investment in the United States.
Safran is acquiring L-1’s secure credentialing, biometric and enterprise access, and enrollment services business units, which are expected in fiscal year 2010 to bring in revenues of $486 million and adjusted earnings before interest, tax, depreciation, and amortization of $82.5 million. L-1 says the merger with Safran will give the company a more global footprint, the potential for greater research and development investments, and the opportunity to expand into new markets.
The Safran deal hinges on the completion of L-1’s sale of its intelligence services business to BAE Systems, for $295.8 million in cash and another $7.2 million in assumed obligations. The proceeds from this deal, which is expected to close in the fourth quarter of 2010, will go toward repaying debt L-1 took on through a secured credit facility, according to the company announcement.
L-1 had revenues of $650.94 million across all its business for fiscal year 2009, but posted an annual loss of $4.2 million, after operating and interest-related expenses. The company did not respond to a request for further details on the transactions.