Netherlands-based digital security company Gemalto on Dec. 9 said it has agreed to acquire the identity management business of 3M Corp. [MMM] for $850 million in cash, saying the deal will round out its government solutions business and positions it to provide commercial biometrics solutions.
The deal is expected to close in the first half of 2017, subject to regulatory approvals. 3M’s identity business includes biometrics solutions provider Cogent, the Document Reader business, and Secure Materials business, which combined have $215 million in annual sales and operating income of $58 million.
Announcement of the deal follows an agreement in September by the Massachusetts-based private equity firm Advent International to acquire the identity solutions business of France’s Safran Group for $2.7 billion. Advent plans to combine the Safran business with digital security technology provider Oberthur Technologies. The Advent acquisition is also expected to close in 2017.
3M’s identity management business sells to governments, law enforcement, border control and civil identification entities globally. The company’s fingerprint matching algorithms are a key feature of the U.S. IDENT biometric matching system operated by the Department of Homeland Security.
Gemalto said that once the deal closes, “Our combined offers and experience in the Public sector to manage the enrolment, identification of individuals, flow of passengers and border control should contribute to stronger national security. On the commercial side, as online and mobile transactions grow, new forms of multi-factor authentication and identification are needed to complement physical ID documents. 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.”
Gemalto plans to combine the 3M business with its Government Programs business, which had $416 million in sales in 2015.
The 3M identity business has 450 employees that will transfer to Gemalto.
Goldman, Sachs & Co. served as 3M’s financial advisor on the deal.