SCM Microsystems and Hirsch Electronics to merge
ISMANING, Germany and SANTA ANA, Calif.Ã¢â‚¬â€German smart card-based logical access reader manufacturer SCM Microsystems and Hirsch Electronics announced this week they have entered into a definitive agreement to merge.
Pursuant to the proposed merger, the security holders of Hirsch will receive a combination of cash, SCM common stock and warrants to purchase shares of SCM common stock, with total consideration based on the price of SCM common stock at the time of closing.
The NASDAQ traded SCM stock was up .31 to $1.58 early Thursday on news of the deal.
According to an SEC filing, Ã¢â‚¬Å“[f]or each of the approximately 4.7 million Hirsch shares outstanding, at the effective time of the merger, Hirsch stockholders will receive $3 cash, two shares of SCM common stock, and a warrant to purchase one share of SCM common stock at an exercise of $3.Ã¢â‚¬Â This makes the deal worth roughly $30 million were it to close today, with a possibility of another $14.1 million being infused into the new company, to be known as SCM Microsystems.
SCM and Hirsch products will continue to be marketed under their respective brand names.
Ã¢â‚¬Å“This merger essentially doubles the size of our company and brings significant benefits to our customers, shareholders and employees,Ã¢â‚¬Â commented Felix Marx, chief executive officer of SCM Microsystems, in a statement. Ã¢â‚¬Å“Customers worldwide are calling for converged solutions for information security and physical access control, and that is creating demand for a broad set of devices from doors to desktops with support for smart cards, biometrics and contactless technologies. By combining our respective product lines and resources we can address the full spectrum of customer needs, making our combined company much more valuable to our customers.Ã¢â‚¬Â
Ã¢â‚¬Å“The synergies in the companiesÃ¢â‚¬â„¢ product lines and the opportunities for new, highly integrated security products are tremendous,Ã¢â‚¬Â said Larry Midland, president of Hirsch Electronics, in a statement. Ã¢â‚¬Å“There is virtually no overlap in the companiesÃ¢â‚¬â„¢ current lines, yet the products and technologies are extraordinarily complementary. And, in both our organizationsÃ¢â‚¬â„¢ DNA, we have a commitment to the customer and a clear focus on innovation, reliability, and company integrity. I believe this is an ideal match.Ã¢â‚¬Â
Following the merger, Midland is expected to join the board of directors of SCM Microsystems and will become an executive officer of the combined company.
The merger agreement has been approved by the boards of directors of both companies and is subject to the approval of both SCMÃ¢â‚¬â„¢s and Hirsch's stockholders.