Viisage Technology Inc., a Billerica, Mass., vendor of biometric authentication systems, has agreed to buy Identix Inc. of Minnetonka, Minn., for $770 million in stock.
The companies said the deal, announced Thursday, would create a biometric powerhouse by combining Viisage's authentication and verification capabilities with Identix' biometric search technology.
Identix shareholders would receive 0.473 newly-issued Viisage shares for each of theirs. The deal is expected to close next quarter.
This year Viisage expects to generate about $220 million of revenue and at least $40 million of earnings before interest, taxes, depreciation, and amortization.
In 2003 the U.S. online banking unit of ING Group NV said it was using Identix fingerprint scanners for background checks on new employees. In November, Wachovia Corp. said it had hired ChoicePoint Inc., a vendor that uses Identix scanners, to conduct such checks.
Robert V. LaPenta, Viisage's chairman, said in a press release that the acquisition would "create a global leader in biometric security, providing end-to-end identity solutions for state, local, national, and foreign government use, as well as a wide application across the commercial sector."
Celent Communications LLC of Boston says that widespread use of biometrics in banking is years away, but that demand for strong authentication will encourage it.
Eventually, it says in a report issued last week, biometrics will become common in remote banking channels, such as online banking and automated teller machines.
As in other industries, the technology was first used in banking to confirm the identities of employees logging in to corporate networks. Citigroup Inc. of New York uses it that way.
Some banking companies are already using the technology with customers. Bank of America Corp. of Charlotte scans the hands of those who ask to enter safety-deposit vaults.
Purdue Employees Federal Credit Union of West Lafayette, Ind., has fingerprint scanners in cash-dispensing kiosks in its branches.
Celent's report spotlights two companies offering biometric technology for payments: Solidus Networks Inc., which does business as Pay By Touch, and BioPay LLC, which Solidus is buying. They sell fingerprint scanners for shoppers to use at stores to authorize payments from bank accounts.
