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Gemalto’s Acquisition of 3M Identity Management Business is a Digital Economy Bid

Gemalto Gemalto announces to acquire 3M’s Identity Management Business for US$850 million. The all-cash deal comes amid Gemalto’s strategic expansion on offering biometric technology under its government programs.

This acquisition is sought to both complete Gemalto Government Programs offer by in-sourcing biometric technology and provide solutions for the promising commercial biometrics market. The combined expertise in the Public sector to manage the enrolment, identification of individuals, flow of passengers and border control will contribute towards 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.

Once the acquisition is completed, 3M’s Identity Management Business will become part of Gemalto Government Programs business which is said to have logged revenue of €391 million in 2015.

3M’s Identity Management Business is comprised of 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.

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 asserts to 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.

The acquired business revenue is expected to grow at +10% CAGR with EBITDA margins above 20% by 2020.

“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 Vallée, Gemalto CEO.

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