L-1 Identity Solutions announced that it has entered into an agreement to be acquired by Safran in a merger transaction providing for stockholders to receive $12.00 per share in cash, for an aggregate enterprise value of approximately $1.6 billion, inclusive of outstanding debt.
The per share consideration of $12.00 incorporates the purchase price to be received pursuant to the sale of the L-1 intelligence services businesses. The per share price represents a premium of 24% over L-1’s closing stock price on the NYSE on Sept. 17, and a premium of 66% over the closing stock price on Jan. 5, the day prior to L-1’s announcement of its strategic alternatives review process.
Under the terms of the agreement, Safran has agreed to acquire L-1 Identity Solutions following the sale of L-1’s intelligence services businesses to BAE Systems, Inc. After giving effect to the BAE Systems transaction, L-1 will be comprised of Secure Credentialing Solutions, Biometric and Enterprise Access Solutions and Enrollment Services.
These businesses are expected to have combined estimated Fiscal Year 2010 revenues of $486 million.
Upon close of the transaction, Safran plans to integrate L-1’s operations into its subsidiary, Morpho.
The closing of the Safran acquisition is subject to the prior consummation of the BAE Systems sale transaction, L-1 stockholder approval, review by the U.S. Committee on Foreign Investment in the United States (CFIUS) and certain other closing conditions including Hart-Scott-Rodino antitrust review. The transaction is not subject to financing and is expected to close in the first quarter of 2011, subject to the timing of applicable regulatory processes.
In connection with the Safran transaction, BAE Systems Inc. has agreed to acquire the stock and membership interests of the entities comprising the L-1 intelligence services businesses for a purchase price of approximately $295.8 million in cash and approximately $7.2 million of certain assumed obligations for a total value of $303.0 million.
These businesses include SpecTal, LLC, Advanced Concepts, Inc., and McClendon, LLC. The businesses are expected to have combined estimated Fiscal Year 2010 revenues of $234.0 million.
The close of the BAE Systems transaction is subject to U.S. regulatory approvals, and is expected to close in the fourth quarter of 2010. The BAE Systems transaction is not conditioned on the closing of the Safran merger and is not subject to financing. The net proceeds from the closing of the BAE Systems transaction will be used to repay a substantial portion of the Company’s indebtedness under its secured credit facility.