L-1 renews its offer for ComnetiX
After competition from BIO-Key, L-1 offers $1.05 per outstanding share, bringing the total price to $16 million; ComnetiXa leader in law enforcement-related identity solutions; shareholders approve the deal but have to wait to finalize it on Friday
Business-minded readers will recall our report from late last year concerning L-1 Identity Solutions announcement that it had purchased Ontario, Canada-based ComnetiX for approximately $12.5 million, or $0.82 per share. The deal was intended to improve L-1’s position in the booming Canadian identity solutions market and was seen as part of an ongoing buying spree by the Robert LaPenta-led firm. Now it seems that we (or L-1, on whose news release we relied) jumped the gun. Due to a competing offer by BIO-key International, which extended a share-for-share offer to ComnetiX shareholders on 21 December, L-1 has sweetened the pot. The company is now offering $1.05 per share of Comnetix stock for all issued and outstanding ComnetiX shares. That increase brings the purchase price to roughly $16 million.
ComnetiX is strongly positioned as a biometrics provider for law enforcement — the company was a leader in helping the FBI develop standard protocols for the transmission of electronic fingerprints, known as Electronic Fingerprint Transmission Standards (EFTS) — and has averaged approximately $9 million in revenue over the past two years. If the deal goes through, L-1 anticipates a growth to $13 million by the end of next year. Current customers include Toronto Police Services; CISC (Criminal Intelligence Services Canada); the Department of Criminal Justice Services for the state of New York; Minesterio De Justicia, Spain; and the Boston Police Department.
The Comnetix board of directors has reportedly accepted the offer and advised shareholders to accept. The next step will be to have the company’s shareholders vote on the offer at their shareholder meeting on Friday, 19 January in Toronto.
-read more in this SecurityInfoWatch report
