Comnetix acquisition moves L-1 into Canada

Monday, January 1, 2007

STAMFORD, Conn.--L-1 Identity Solutions on Nov. 15 announced a definitive agreement to purchase all outstanding shares of Ontario-based biometrics company ComnetiX, for $12.5 million. After the deal goes through, the biometric behemoth will be poised to increase its domestic services business and take advantage of a "sea change" that's coming in Canada as that country moves from ink to electronic-based fingerprinting, said Doni Fordyce, executive vice president of corporate communications for L-1 Identity Solutions.
The Royal Canadian Mounted Police, Canada's national law enforcement group, currently uses names for background checks but will begin using fingerprint biometrics for background checks and credentials in 2008, said Fordyce.
"This is a very important change for Canada and we thought if we wanted to be a participant and play, we needed to be a Canadian vendor in order to be widely accepted by the Canadian market," she said.
ComnetiX provides authentication technologies to approximately 40 percent of the Canadian market through its chain of offices.
The company had $9 million in revenue in FY 2005 and $9 million for the first three quarters of FY 2006. Its customers include many government clients, transportation and commercial business.
The acquisition will also give L-1 increased presence in services business in the United States.
ComnetiX in the 1990s helped the FBI develop standard protocols for the transmission of electronic fingerprints. It was the first company in the United States to transmit federally compliant electronic fingerprints to the FBI, and the first in Canada to establish a national distributed criminal intelligence database.
The company has 10 fingerprint centers in Canada and 40 applicant fingerprinting services locations in the United States. It has a significant installed base of customers for live scan products and services in New York and Georgia.
The deal, which is subject to regulatory and court approval, is expected to become final in the first quarter of 2007. When the deal is complete, ComnetiX management will report to the L-1 division Integrated Biometrics Technologies, previously a competitor with ComnetiX.