Peter O’Neill, President, findBIOMETRICS (fB): Let’s start off with the big news, HID acquires Lumidigm! Can you please tell us about this news?
Bob Harbour, Executive Director, Lumidigm (L): After in-depth strategic discussions between the companies we are certainly pleased that this M&A transaction occurred and Lumidigm is now part of HID Global, an ASSA ABLOY Group brand.
It will be business as usual for Lumidigm… just more business, given the fact that HID Global is a large and significant leader in the security space with a strong product offering that complements ours nicely.
fB: What were the key drivers behind the acquisition?
L: The key drivers from Lumidigm’s standpoint were a strategic acquirer that was a profitable growth company that valued our IP, people and products and that had resources that could help us do more in the way of technology and product development than we would be able to do on our own. In addition, we were looking for a company with a worldwide sales and marketing infrastructure that would allow us to market not only our products but other new products that would be a combination of HID Global and Lumidigm offerings to provide strong authentication solutions for all our existing and new customers.
fB: You started to talk about what this would mean for Lumidigm, are there any changes anticipated for the company?
L: The team in Albuquerque, which is comprised of engineering and R&D as well as in-house sales and marketing, is a biometrics center of excellence within the larger organization. Also, we do much of our manufacturing locally at Delta Electronics. All of that is business as usual. Our sales team which is spread out across the world will remain where they are currently located and become part of the larger HID global sales team.
fB: Well it seems like an ideal fit and I think that the industry has seen quite a few of these mergers and acquisitions over the past five years or so. Do you expect that this trend will continue as biometrics moves rapidly into the mobile and commercial marketplace?
L: Yes I do as acquisitive growth of smaller companies by major players is common in most industries. I think that this M&A is a classic scenario: a start-up company builds up a successful, profitable business with brand differentiation, large IP portfolio and a great team of innovative people but can only take it so far and at some stage in the evolution of their company they get acquired by somebody that has more resources and more reach and that combined entity can take the combined businesses to new heights.
As chairman of our industry association, IBIA, I certainly have seen biometrics identification solutions evolve into commercial and mobile marketplaces. I think, from that perspective, HID Global as a worldwide leader in secure identity solutions expanding into biometrics does further validate this market and the important role biometrics has to play in the future growth of our industry. Lumidigm and HID Global share a market focus on healthcare, banking, corporate and industrial verticals. These are growth areas where, working together, we can offer highly differentiated solutions. Of course, HID Global is a major player in government as well. We share a focus in not only these verticals but also geographically. We are both active in South America and South Africa and much of Lumidigm’s sales as well as HID Global sales come from outside the United States.
fB: You have had quite good success in South America recently, can you tell us a little bit about that?
L: The Brazilian market in particular has a decentralized banking system which relies heavily on ATMs. Those ATMs are unattended so it is important to have a high security biometric solution that can’t be spoofed and that has encryption capabilities so that it can’t be hacked. Lumidigm’s V-Series fingerprint sensors have been very well received there and very well adopted. Several of the major banks in Brazil are using the Lumidigm product line with their ATM machines and those deployments are attracting interest from other countries in terms of that banking model and how well it works. So we are very pleased with the success we have had there. HID Global also has a strong presence in Brazil, which is another synergy between our two companies that will allow us to provide our combined customers in that region with an even broader range of solutions.
FB: You mentioned your role as the chairman of the IBIA; can you just please review why it is so critically important for companies to get active in the industry at this very important growth phase of our industry?
L: What I have seen during the time that I have been with the IBIA is that biometrics started with largely a government, law enforcement and civil ID focus and that is still important but there is all kinds of evidence over the last few years that people are looking for something other than PINs and passwords for convenient and secure authentication solutions in commercial and consumer markets. Biometrics is crossing all facets of our lives, and with the introduction of the iPhone with the biometric and other smartphones that are soon going to be coming out with biometrics, you’ve got millions of newly habituated biometric users which is going to help with the acclimation of society to use biometrics more freely. Biometric identification solutions have to be both secure and convenient to be broadly accepted. From the IBIA perspective, I see a lot of excitement and focus in this area and new members are joining IBIA representing these newer verticals and newer customer bases. So it really is a dynamic time of change for our industry and for all the companies with a stake in this industry it is time to get involved to jointly face the challenges and opportunities ahead.
fB: It really is an exciting time and congratulations on this great news for Lumidigm and great for our industry!
L: Yes, interest in biometrics from major players in our industry like HID Global and ASSA ABLOY is a sign that biometric identification has come of age. The fact that HID Global has made this move and that they have made other acquisitions recently like IdenTrust shows their commitment to establish themselves as a leader in the virtual credentials space to provide innovative solutions for their customers.
fB: Thank you very much Bob for taking the time to tell us about this acquisition and I wish you well for the remaining of the year.
L: My pleasure Peter.