SCM Microsystems and Hirsch Electronics to merge
ISMANING, Germany and SANTA ANA, Calif.--German smart card-based logical access reader manufacturer SCM Microsystems and physical access manufacturer Hirsch Electronics announced this week they have entered into a definitive agreement to merge.
Ã¢â‚¬Å“WeÃ¢â‚¬â„¢ve been working cooperatively with them for years,Ã¢â‚¬Â noted Hirsh vice president of marketing Rob Zivney. Both are active in government/HSPD-12 space, and Hirsh announced earlier this year it would be distributing SCMÃ¢â‚¬â„¢s logical access readers. Ã¢â‚¬Å“ThereÃ¢â‚¬â„¢s not going to be any change in our business in the near term. I think whatÃ¢â‚¬â„¢s going to happen is the rest of the world will look at this and say, Ã¢â‚¬ËœWhy didnÃ¢â‚¬â„¢t I think of that? That makes a lot of sense.Ã¢â‚¬â„¢Ã¢â‚¬Â
In what executives are calling a deal Ã¢â‚¬Å“like an IPO for Hirsch,Ã¢â‚¬Â 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 at Dec. 11Ã¢â‚¬â„¢s SCM price point, with a possibility of another $14.1 million being infused into the new company, to be known as SCM Microsystems.
The NASDAQ-traded SCM stock was up .31 to $1.58 early on the first day of news of the deal.
After the close, SCM and Hirsch products will continue to be marketed under their respective brand names, and Hirsch will operate as a wholly owned subsidiary of SCM. The only executive change is Hirsch president Larry MidlandÃ¢â‚¬â„¢s expected new position on the SCM board and as an SCM executive officer.
Both companies emphasized the complementary nature of their products. Ã¢â‚¬Å“There is no overlap at all,Ã¢â‚¬Â said Manfred Mueller, executive vice president at SCM. Ã¢â‚¬Å“And customer-wise, there are only a few, but all of the Hirsch customers need logical access ... We want to leverage their dealer landscape. We think all of their dealers could easily install our products.Ã¢â‚¬Â
Zivney said HirschÃ¢â‚¬â„¢s Professional Services division is already working with SCM products to create converged access control for dealers and customers, and the smart card is increasingly being leveraged for more and more services.
Ã¢â‚¬Å“That smart card is just another computer on the network,Ã¢â‚¬Â Zivney said. Ã¢â‚¬Å“YouÃ¢â‚¬â„¢ll see more applications and strengths in the smart card.Ã¢â‚¬Â
Ã¢â‚¬Å“Customers are going to really ask, Ã¢â‚¬ËœHey, can we tie these together? Ã¢â‚¬ËœHow are they tied together?Ã¢â‚¬â„¢ With this deal, that puzzle piece is now on both sides and can do this for you,Ã¢â‚¬Â emphasized Bob Beliles, vice president, enterprise business development at Hirsch.
Ã¢â‚¬Å“They have a dream and we have a dream,Ã¢â‚¬Â agreed Mueller, Ã¢â‚¬Å“that logical and physical access should be converging; they have to be converging going forward. We know those needs form the logical customers, and they know they needs of the physical side. And thatÃ¢â‚¬â„¢s how things came together, from both a market and product point of view. And now weÃ¢â‚¬â„¢ll have the global reach and the global presence.Ã¢â‚¬Â