LaserCard to Be Acquired by Assa Abloy for $80 million

LaserCard Corporation has entered into a definitive agreement to be acquired by ASSA ABLOY AB, at a price of $6.25 per share through a cash tender offer. The total transaction value is approximately $80 million. This per share price represents a premium of approximately 38% over the closing price of LaserCard shares on December 17, 2010 and a premium of 42% over the 20-day average of closing prices. LaserCard will become part of ASSA ABLOY’s HID Global business with LaserCard’s secure identity products, solutions and services complementing HID Global’s identity solution offering.

“The secure identity markets are rapidly growing and the need for enhanced security is driving increased sophistication in identity credentials and systems,” said Robert T. DeVincenzi, president and CEO of LaserCard. “LaserCard is pleased to add its capabilities to the expanding portfolio of customer solutions that HID Global is offering to the market.”

Imperial Capital LLC acted as exclusive financial adviser to LaserCard. O’Melveny & Myers LLP acted as counsel to LaserCard.

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Totally unknown in the storage industry, Swedish company Assa Abloy is involved in door opening solutions for security, safety and convenience. But it has already some activities in secure identity and and contactless smart cards through subsidiary HID Global, acquired in 2000, for national ID and passport programs.

The group has its own operations in 50 countries with leading positions in much of Europe and North America and in Australia. In the electromechanical security segment, it's also a leader in areas such as access control, identification technology, door automation and hotel security.

Since its founding in 1994, Assa Abloy has grown from a regional company to an international group with 37,000 employees. In 2009, turnover amounted to approximately SEK 35 billion and the operating profit to SEK 5.4 billion. It is listed on NASDAQ OMX Stockholm, Large Cap, and has a market cap of around SEK 73 billion.

The firm also acquires recently ActivIdentity, in intelligent identity assurance, as well as last year Cerracol, in the Central American lock market, Portsystem 2000, Swedish manufacturer of industrial doors, Pan Pan, Chinese security steel door manufacturer, and Italian-based Ditec Group, in entrance automation products for pedestrian, sectional, high speed doors and gates.

There is apparently no relation with the business of LaserCard even if both companies are involved in security.

Formerly Drexler Technology and originally a supplier of photomasks to the semiconductor industry, LaserCard then has built all its activity on it own proprietary optical cards for identity management. After several years of moderate-sized orders, the breakthrough order for optical memory cards came in February 1997 in the form of a $7.1 million order for Permanent Resident Cards (Green Cards) to be issued by the U.S. Immigration and Naturalization Service.

The company was founded in 1967 by prestigious inventor Dr. Jerome Drexler who retired as chairman in 2004.

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Dr. Jerome Drexler in 1982

LaserCard, headquartered in Mountain View, CA has offices in Rastede and Ratingen in Germany, employs 182 people with revenues of $59 million in 2009. But it never really succeeds. For its last quarter ended October 1, 2010, revenues were only $12.7 million and down 12% from the same period one year ago.

Its optical card products are used by 400 customers in 44 countries, claimed the company. Recently the firm decided to offer new ID cards based on integrated circuit or smart cards and not only optical ones.