News
BIO-key International to focus on rapidly growing Biometric and Identity Management Business
BIO-key International, Inc, a leader in wireless public safety and finger-based biometric identification solutions, today announced it has entered into an Asset Purchase Agreement to sell its Law Enforcement Division to InterAct911 Mobile Systems, Inc. an affiliate of privately held InterAct Public Safety Systems for $11 million. The sale, which is subject to customary closing conditions, including BIO-key shareholder approval, will allow BIO-key to take advantage of the rapidly growing biometric and identity management market by focusing on its biometric solutions.
"We see enormous potential emerging in the biometrics market. Our relationships with premier partners and customers like Sagem, McKesson, Radiant Systems, ATT, Lexis-Nexus, blood banks and international resellers make us well positioned for growth", said Mike DePasquale, BIO-key's CEO. "The industry is waiting for decisions from two of the largest and most prominent biometric opportunities in the world and the winner of one or both of these Federal projects will gain international credibility and technological validation. We believe our leadership VST finger biometric software combined with our technology partner's solutions has us well positioned in these opportunities. Beyond that, we are confident that we can compete and win large scale biometric projects on a global basis as well providing robust physical and cyber security solutions."
The market need for security and identity management solutions that can't be lost, forgotten or stolen is beginning to grow rapidly. The most recent report issued by the International Biometrics Group projects that annual biometric industry revenues will grow from $3.4 Billion in 2009 to $9.4 Billion by 2014.
DePasquale added, "This sale gives us the opportunity to become a leading, growing and profitable biometric company by focusing all our resources and investments in the high-growth, high-margin biometrics market with a net debt-free balance sheet at closing and adequate cash capability to invest in marketing our biometric capabilities."
BIO-key's products have long been part of the InterAct Public Safety System's Connections Framework, a collection of seamlessly integrated products that vastly improve the efficiency of emergency response operations, such as CAD, Geographic Information Systems (GIS), Records Management Systems (RMS), and Next Generation 9-1-1 phone controllers.
"As a result of this acquisition, we have the unique opportunity to deliver the most advanced mobile law enforcement solution to ever hit the market, and to introduce a new population of customers to the advantages inherent in the InterAct Connections Framework," said InterAct Public Safety Systems Executive Chairman and CEO Andrew J. "Flip" Filipowski, a highly regarded and successful high-tech entrepreneur, philanthropist, and industry visionary. (Flip founded and grew PLATINUM Technology into the 8th largest software company and sold it to Computer Associates for $4 billion.). "Looking ahead, we will build on the best attributes of both mobile product suites to give first responders the most advanced resources with which they can protect their communities."
Total consideration for this transaction is $11 million, including $7 million in cash at closing and a $4 million guaranteed secured note issued by the buyer. The buyer will also be given warrants to purchase up to 8 million shares of BIO-key common stock at 30 cents per share.
When the transaction closes the company expects that all its preferred stock will be redeemed and its balance sheet will be net debt-free with a capital structure that is made up of only common stock.
Kaufman Bros., L.P. acted as exclusive financial advisor to BIO-key in connection with the transaction.