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BiometricsSafran completes L-1 acquisition, becomes world’s biometric leader

Published 1 August 2011

In the latest series of purchases by traditional defense firms seeking to diversify their portfolios, French defense company Safran recently completed its $1 billion acquisition of biometric solution provider L-1 Identity Solutions making it the world’s market leader in biometrics

In the latest series of purchases by traditional defense firms seeking to diversify their portfolios, French defense company Safran recently completed its $1 billion acquisition of biometric solution provider L-1 Identity Solutions making it the world’s market leader in biometrics.

The deal was initially announced in September of last year, but was put on hold until the Committee on Foreign Investment in the United States approved the acquisition of the Connecticut-based L-1 Identity Solutions to a foreign firm.

To protect U.S. national security interests, Safran will establish a three-person proxy board to manage sensitive U.S. contracts, which make up roughly 80 percent of L-1’s business. Such agreements are common for security companies that are acquired by foreign companies.

Safran’s proxy board will include Barbara McNamara, the former deputy director of the National Security Agency, and William Schneider Jr., the former undersecretary of state under Ronald Regan. Their appointments have yet to be approved by U.S. officials.

The decision to pick McNamara and Schneider, two former officials with deep ties to the U.S. defense community and industrial base, was designed to keep L-1’s connections to the United States as the company’s largest shareholder is now the French government, which owns the state-controlled Safran.

The acquisition of L-1 comes as the French defense giant seeks to diversifyits revenue stream. Currently, the company’s core business consists of developing jet engines and supplying France’s military.

Safran also operates Morpho, a company that develops detection technology and encryption software among its diverse portfolio.

With defense budgets in many countries shrinking, traditional contractors have begun setting their sights on smaller companies with expertise in cyber security, biometrics, surveillance, intelligence, and civil security.

L-1 Identity Solutions specializes in developing fingerprint, palm, face, and iris biometric recognition solutions. Its products are currently deployed by the U.S. military, border patrol agents, local law enforcing agencies, and private companies.

The deal offers L-1 access to Safran’s global infrastructure, deep research and development resources, and broader international reach.

In a letter to customers, Daniel Vassy, president and CEO of MorphoTrak, said: “This acquisition creates the undisputed world leader in secure identity management. The advanced technologies offered by L-1 Identity Solutions and Morpho will be preserved and enhanced, thanks to our highly complementary areas of excellence and the creation of common platforms for innovation.”