Advent will proceed with the sale of IDEMIA “imminently”, according to a new report from Reuters. Goldman Sachs and Rothschild have been retained to organize a deal amid some unease about unfavorable market conditions, though IDEMIA’s “prized biometrics and ID business” is expected to attract strong interest.
Reuters first reported Advent’s plans for the sale in February, noting that such a transaction would capitalize on heightened demand for cybersecurity technologies, and, if successful, would offer some relief with respect to IDEMIA’s considerable debt.
Now, citing unnamed sources familiar with the matter, Reuters reports that Advent is just about ready to proceed, though there are internal concerns about doing so in a volatile market environment that has seen a 25 percent loss in the Nasdaq and a more than 30 percent decline in Europe’s tech index to date. Technology companies tend to be devalued during periods of interest rate hikes, and monetary authorities the world over have been showing an appetite for the latter as a means of fighting rampant inflation.
Remarkably, however, the numbers being thrown around for a potential deal have not changed since February. Back then, sources close to the deal said they expected to raise about €3 billion for the government-focused portion of IDEMIA’s business, and about €1 billion for its enterprise-focused components. Now, they’re hoping for about €3 billion for the “biometrics and ID business” – in other words, the government-focused bit – and €1 billion for IDEMIa’s SIM card operations, though they’re hesitant to offer more precise valuations.
As for who is going to buy the businesses, that remains unclear. IDEMIA’s compatriot and major rival Thales had signaled potential interest earlier this year, though antitrust concerns would likely prevent it from buying up the entire company. Advent now seems perfectly willing to slice IDEMIA into parts, but Thales’ name does not appear to have been floated in the latest leaks to Reuters.
In any case, the bidder for IDEMIA’s biometrics, identity, and security business would need to obtain clearance from the French government, due to IDEMIA’s sensitive and ongoing contracts with government agencies. That having been said, Reuters’ sources were keen to note that Boston-headquartered Advent is not a French company, and so the government would not necessarily object to IDEMIA being sold to another non-French firm going forward.
September 2, 2022 – by Alex Perala