3M to buy out Cogent

30/08/10

3M has made a bold bid to become a major player in the biometrics market by purchasing cash-rich AFIS provider Cogent in a deal valued at US$943 million.

3M is a large diversified company with its operations ranging from Post-It notes to border management products. It is well known for document manufacturing and issuance systems for IDs, passports, and visas; document readers and verification products; as well as security materials, such as laminates, to protect against counterfeiting and tampering.

The acquisition will create a player capable of competing for business against companies such as Morpho and L-1, both of whom have document and biometric capabilities.

3M is bidding to pay 10.50 per share, an 18% premium on Friday's closing price. The proposed transaction has an aggregate value of approximately $943 million, or approximately $430 million net of cash acquired.

The Board of Directors of Cogent Systems has unanimously recommended that the shareholders of Cogent Systems accept the offer and Ming Hsieh, Cogent Systems' founder and CEO, and certain entities affiliated with him, have agreed to tender their shares to the offer. The offer will be subject to the tender of a majority of Cogent Systems' shares and to certain other customary closing conditions. The transaction is expected to close during the fourth quarter of the year.

3M hopes to cash in on the US$4 billion global biometric market, which is projected to grow at a rate greater than 20 percent per year. Cogent's well-known Automated Fingerprint/Palmprint Identification Systems, or AFIS, enable customers to capture fingerprint and palm print images electronically, encode prints into searchable files, and accurately compare a set of fingerprints/palm prints to a database containing potentially millions of prints in seconds.

Mike Delkoski, vice president and general manager, 3M Security Systems Division, commented: "Adding Cogent Systems' products to our business strengthens our product portfolio and services in high security credential issuance and authentication systems and positions 3M's business in law enforcement applications. It also expands our reach into access control and other commercial ID and authentication applications."

With approximately $130 million in revenue in 2009, Cogent Systems is based in Pasadena, Calif., and employs approximately 500 people.

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3M Cogent 3M Cogent is a global biometric identification solutions provider to governments, law enforcement agencies, and commercial enterprises. 3M Cogent delivers the fastest, most accurate, and most sophisticated yet reliable biometric identification solutions in the world.

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3M to buy out Cogent

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