Advent to Sell IDEMIA; Thales Expresses Interest—Report

After years of corporate restructuring, IDEMIA could be up for sale and a potential break-up, according to a Reuters report. What’s more, the company’s biggest rival, Thales, could be a buyer.

Citing unnamed sources, the report asserts that Advent International, IDEMIA’s parent company, has begun consulting investment banks about an auction process that could get underway later this year. IDEMIA could be sold for a value of up to $4.6 billion. Alternatively, it could be carved out into distinct business units, with its government-focused business alone valued at about €3 billion (or roughly $3.4 billion), and its enterprise-focused businesses valued at around €1 billion (about $1.1 billion).

Such efforts would bring further transformation to a security giant that has already experienced more than its fair share of restructuring. IDEMIA was formed through the merger of Oberthur Technologies and Safran Identity & Security in 2017. A number of leadership changes were announced the next year, and in 2019 the company announced the consolidation of its Financial Institutions, Connected Objects, and Mobile Operators divisions into a new business unit called Secure Enterprise Transactions.

Now, carrying a heavy debt, the company is looking to capitalize on heightened cybersecurity demand in the wake of the pandemic and its attendant wave of digital transformation, according to Reuters.

Thales, another French firm that is highly active in the biometrics industry, has already suggested that it is “potentially interested” in a transaction, but ruled out diversifying beyond its core businesses, which comprise digital identity and security, defense, and aerospace. That would suggest that breaking up IDEMIA into discrete components is a requirement for Thales to be a buyer.

Thales’s potential involvement is further complicated by antitrust concerns. The company had to leap through several regulatory hoops to complete its acquisition of Gemalto in 2019, and could require government approval to pursue any major acquisitions involving another domestic technology or defence firm. As such, the company isn’t expected to engage in any serious dealmaking until after France’s upcoming election in April.

Reuters’ report comes in the wake of a major biometric border screening contract win for IDEMIA from Danish authorities, as well as the announcement of an access control collaboration with Genetec in Japan, toward the end of last year. The company has also recently launched a new curb-to-gate biometric passenger processing solution for the North American market, and two new additions to its MorphoWave line of contactless fingerprint scanners.

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February 7, 2022 – by Alex Perala