HID Global to buy Fargo
IRVINE, Calif.--Access control giant HID Global and card issuance manufacturer Fargo Electronics jointly announced on Tuesday that both corporate boards have agreed to a deal where HID will acquire Fargo for an all-cash consideration of $25.50 per share, a total of roughly $325 million. News of the deal pushed Fargo stock up $8.48 on Tuesday to finish at $24.71, though it is subject to regulatory review and Fargo stockholder approval and likely won't close until the third quarter of this year.
According to Forbes.com, Fargo brought in $82 million in revenues over the past year, earning $.76 per share. In the press releases, HID Global chief executive officer Denis Hebert said, "We believe that we are now positioned as a leader in the rapidly growing market for secure issuance of corporate and national ID credentials."
"They're very focused on HSPD-12," reasoned Sandra Jones, a security industry consultant and analyst who heads Sandra Jones and Company. The presidential directive says that, by October, all government agencies and government contractors must be able to issue one biometric smart card to employees for control of both physical and network access control.
"What makes more sense," asked Jones, "[HID] trying to develop a technology from scratch, or taking on Fargo, which already has the branding and the product? It accelerates their time to market."
For the deal, Fargo was advised by Raymond James and Associates, while HID Global employed the services of USB Investment Bank.
For more on how this deal will affect the industry, see the July issue of Security Systems News.