The recent announcement of Gemalto's plan to acquire 3M's Identity Management Business will see the company's expansion of its authentication solution.
The recent announcement of Gemalto's plan to acquire 3M's Identity Management Business will see the company's expansion of its authentication solution. A webinar presented by Gemalto's CEO, Philippe Vallee and Jacques Tierny, CFO at Gemalto, further reiterate the acquisition deal.
As mentioned in the press release, the deal is expected to close in the first half of 2017 with a purchase price of US$850 million provided by cash and existing long term credit facilities. The acquisition will complete Gemalto's Government Programs and offer solutions for the commercial biometric market.
Gemalto specializes in digital security for authenticating individuals and protecting data for various verticals. With 3M's Identity Management Business focus on biometric identity verification and authentication, the acquisition will build upon Gemalto's existing common core technologies of authentication, data protection, key management, secure issuance, and biometric identification. The biometric identification's application will be placed in enterprise, government, payment, and Mobil M2M.
3M's Identity Management Business lines includes biometrics which represents 61 percent of total revenue, 13 percent are from document readers, while 26 percent are from secure materials. Tierny mentioned that 54 percent of fixed revenue for Identity Management Business are from the Americas, 32 percent came from EMEA, and Asia generates about 14 percent.
According to Tierny, "60 percent to 65 percent of 3M's Identity Management Business revenue will be reported as Platform & Services." On a pro forma basis, the addition would have a 2 percentage increase in contribution on Platform & Services activity in 2015 company revenue. By joining Gemalto's Government Programs business, 3M's Identity Management Business "would have represented around 18 percent of 2015 company revenue on a pro forma basis," said Tierny.
The impact of financial contribution toward the company is expected to be limited to the second semester of 2017.