Safran Said to Be in Talks to Purchase Most of L-1 Identity Solutions Inc.
Safran SA, the defense-electronics maker, is in talks to purchase most of L-1 Identity Solutions Inc., according to two people with knowledge of the matter. L-1 shares surged the most in more than four years.
Safran is among the bidders pursuing a deal to buy L-1’s businesses that help customers track biometric data, said the people, who declined to be identified because the talks are private. U.S.-based L-1 is likely to be split up, with another buyer acquiring a separate unit that sells consulting services to U.S. intelligence agencies, said one of the people. No deal is likely to be reached for several weeks, the person said.
A deal would be Safran Chief Executive Officer Jean-Paul Herteman’s latest effort to boost revenue from biometric technology, used for fingerprint, palm, iris and facial recognition. Paris-based Safran has said it expects the biometrics market to grow 15 percent a year over the next five years.
L-1 had a stock market value of about $670 million as of yesterday. The company, based in Stamford, Connecticut, said in March it would explore “strategic alternatives” including a sale.
“There are multiple companies interested, in the whole or in parts,” said Doni Fordyce, an L-1 spokeswoman. Potential buyers are currently looking at L-1’s books, she said. Fordyce declined to identify the interested companies. Catherine Malek, a Safran spokeswoman, declined to comment.
L-1 rose $1.40, or 19 percent, to $8.65 at 4:15 p.m. in New York Stock Exchange composite trading, their biggest one-day gain since October 2005.
Safran’s talks with L-1 have recently slowed, said one of the people with knowledge of the matter, as the French company focuses on Zodiac Aerospace. Safran on July 11 confirmed it offered to buy the French aviation-equipment maker.
Zodiac, which had a stock market value of 2.4 billion euros ($3.2 billion) as of yesterday, has rejected the approach.
Safran lost a bidding contest in 2008 to buy an identification unit of Beaverton, Oregon-based Digimarc Corp. when the business was sold to L-1 for $310 million.
L-1’s Chief Executive Officer, Robert LaPenta, formed the company after serving as president and chief financial officer of L-3 Communications Holdings Inc. from 1997 to 2005. LaPenta helped start L-3 with co-founder Frank Lanza after both men left Lockheed Martin Corp.