Biometrics investment firm ID'd
STAMFORD, Conn.--Robert LaPenta, co-founder of defense contractor and Lockheed Martin spin-out L-3 Communications, formed a new biometrics investment firm that will seek to solidify the now fragmented market.
L-1 Investment Partners' mission is to invest in existing public or private companies in all stages of development, either pre-revenue companies or those already selling in the marketplace. LaPenta seeks to attain a controlling stake or the entire entity through his investments. Once acquired, L-1 will provide follow-up financing and management assistance.
"We think it's an exciting time to be in this business," said LaPenta. "You can compare it to defense 20 years ago--there were many companies that didn't have the money or the management to grow."
LaPenta founded L-1 in May, and he contributed his own money to start the firm and has discussed raising additional capital with investment banks and money managers. He declined to disclose how much of his own money he has committed to the venture and how much external financing he would accept.
In its first few months of business, the firm is already evaluating its first investment. LaPenta would not discuss the deal.
Biometrics is a subset of the security industry that uses both software and hardware to confirm an individual's identity. Such products scan a person's iris, fingerprints or facial features to compare to an existing profile in a database.
"Biometrics is at the infancy stage with a number of companies that would benefit from the roll-up strategy," said LaPenta. "We think we can build a sizable company in a short period of time."
And it doesn't hurt LaPenta's chances of success that he made important contacts within the government space during his time at L-3, pointed out Joseph Freeman, principle at J.P. Freeman Co. The primary users of biometrics applications are in the government space at this time. This is due to the number of buildings that need to be secured and the high cost of deployment.
But that will change as prices drop and more users in the public space seek ways to integrate these technologies into their security systems. "In time, biometrics will be increasingly cost effective," Freeman projected.
LaPenta retired from L-3 in April, where he served as director, president and chief financial officer until his departure. During his tenure, the company grew to approximately $6.8 billion in revenues in 2004 from $650 million in 1997.
LaPenta and Frank Lanza, in conjunction with Lehman Brothers, founded L-3 in 1997. Lanza continues to work at the company as chairman and chief executive officer.
Existing customers of L-3 and potential customers of L-1 include the Department of Defense and the Transportation Security Administration.