Filed by Viisage Technology, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933, as amended, and deemed
filed pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934, as amended
Subject Company: Identix Incorporated
Subject Company's Exchange Act
File No. 01-09641
FOR IMMEDIATE RELEASE
Doni Fordyce
L-1 Investment Partners
203-504-1109
dfordyce@l-1ip.com
VIISAGE TO ACQUIRE IRIDIAN TECHNOLOGIES
BILLERICA, MASS. - JULY 17, 2006 - Viisage Technology, Inc. (Nasdaq: VISG) today
announced that it has entered into a definitive agreement to acquire
privately-held Iridian Technologies, Inc., the company responsible for the
initial development and commercialization of iris recognition technology.
Iridian's extensive intellectual property portfolio and industry-standard iris
recognition algorithm will be combined with Viisage's wholly-owned subsidiary
SecuriMetrics, Inc. to advance the development and implementation of
SecuriMetrics' advanced hardware, software and database capabilities. Upon
completion of the Iridian transaction and the pending merger with Identix
Incorporated (Nasdaq: IDNX), Viisage is expected to become the only U.S.-based
manufacturer of a full range of handheld and multi-modal biometric recognition
solutions encompassing iris, finger and face.
Under the terms of its definitive agreement with Iridian, Viisage will pay
Iridian shareholders $35 million in cash. In parallel with the negotiation of
the Iridian transaction, Viisage also secured a $6.5 million reduction in
potential contingency payments to SecuriMetrics under the terms of Viisage's
February 2006 acquisition of SecuriMetrics, resulting in an effective "net"
purchase price for Iridian of $28.5 million. The acquisition of Iridian will be
funded primarily by proceeds from the initial $100 million investment into
Viisage by L-1 Investment Partners in December 2005.
Iridian is expected to have positive net working capital and be debt free at the
time of the close of the transaction. The company is estimated to generate
positive pro forma EBITDA of approximately $3 million in 2006. Closing of the
Iridian transaction, which is anticipated to occur in August 2006, is subject to
the satisfaction of a number of customary precedent conditions, including
obtaining requisite Iridian shareholder approval.
Current Iridian licensees (including Panasonic and Oki Electric Industry Co.)
will continue to have non-exclusive rights to deploy Iridian's software and
related intellectual property in integrated products manufactured by the
licensees.
"With direct access to the IP that underpins the iris recognition market, our
business will realize improved margins and cost synergies, as well as
significant revenue opportunities," said Robert V. LaPenta, Chairman of the
Board of Viisage. "Most importantly, we believe the market will now be primed
for accelerated growth as the development of critical services and products
required for widespread adoption of iris recognition technologies can proceed
ahead unencumbered."
Iris recognition technology identifies people by the unique patterns of the iris
- the colored ring around the pupil of the eye - and is designed to meet the
authentication needs of large-scale, country-wide applications. Iridian filed
the first industry patent (Flom) for this technology in 1987, and with it
controlled greater than 90 percent of the iris recognition market until the
expiration of the patent beginning in 2005. Today the company maintains an
extensive intellectual portfolio in this area, including holding the key iris
algorithm patent that is the industry standard for iris recognition.
Iridian licenses iris recognition software and related intellectual property to
hardware and software developers for applications in the government, military
and commercial markets, both domestically and internationally. One of Iridian's
more significant deployments includes the United Arab Emirates (UAE) Border
Control Program. This program uses Iridian software in combination with
third-party hardware at all land, air, and sea ports for enrolling visa
applicants and visitors. The purpose of the program is to identify high risk or
expelled individuals and ensure that they are prevented from re-entering the
country. To date, the program is believed to have prevented more than 70,000
expellees from re-entering the country.
"This acquisition brings together the premiere iris device and database
management provider with the recognized leader in iris algorithm development and
will provide tremendous benefits to our customers and the overall market," said
Greg Peterson, Founder & CEO of SecuriMetrics. "This combination removes the
market perception and technology development challenges that have prevented
widespread market adoption and will support the development of the truly
multi-biometric search capability that is in such high demand by large federal
projects and civil agencies."
Iridian's business operation, currently located in Moorestown, N.J., is expected
to be integrated into Identix' Jersey City, N.J. research facility once the
pending Identix merger is consummated.
EBITDA
Viisage uses EBITDA as a non-GAAP financial performance measurement. EBITDA is
calculated by adding back to net income (loss) interest, taxes, depreciation and
amortization. EBITDA is provided to investors to complement results provided in
accordance with GAAP, as management believes the measures help illustrate
underlying operating trends in the Company's business and uses the measures to
establish internal budgets and goals, manage the business, and evaluate
2
performance. Management also believes that EBITDA provides an additional tool
for investors to use in comparing Viisage's financial results with other
companies in the industry, many of which also use EBITDA in their communications
to investors. By excluding non-cash charges such as amortization and
depreciation as well as non-operating charges for interest and income taxes,
Viisage can evaluate its operations and can compare its results on a more
consistent basis to the results of other companies in the industry and to its
operations in prior quarters. As noted above, EBITDA excludes the effect of
interest, taxes, depreciation and amortization. Because EBITDA eliminates these
items, Viisage considers this financial measure to be an important indicator of
the Company's operational strength and performance of its business and a good
measure of the Company's historical operating trend. EBITDA should not be
considered in isolation or as a substitute for comparable measures calculated
and presented in accordance with GAAP. Estimated pro forma EBITDA for 2006 has
been calculated by adding estimated pro forma depreciation and amortization of
$1.2 million to pro forma estimated net income of $1.8 million.
ABOUT VIISAGE TECHNOLOGY, INC.
Viisage delivers advanced technology identity solutions for governments, law
enforcement agencies and businesses concerned with enhancing security, reducing
identity theft, and protecting personal privacy. Viisage solutions include
secure credentials such as passports and drivers' licenses, biometric
technologies for uniquely linking individuals to those credentials, and
credential authentication technologies to ensure the documents are valid before
individuals are allowed to cross borders, gain access to finances, or be granted
other privileges. With more than 3,000 installations worldwide, Viisage's
identity solutions stand out as a result of the company's industry-leading
technology and unique understanding of customer needs. Viisage's product suite
includes IdentityTOOLS(TM) SDK, Viisage PROOF(TM), FaceEXPLORER(R),
iA-thenticate(R), ID-GUARD(R), BorderGuard(R), PIER(TM), HIIDE(TM),
AutoTest(TM), FacePASS(TM) and FaceFINDER(R).
ABOUT IRIDIAN TECHNOLOGIES
Iridian Technologies, Inc., of Moorestown, NJ is the world leader in development
and commercialization of iris recognition technology - renowned as one of the
most accurate biometric identifiers. The holder of US and international patents
behind iris recognition technologies, Iridian offers unparalleled security for
public-use applications such as simplified passenger travel, border control,
national IDs, and election verification as well as restricted access and
information access. For more information, visit www.iridiantech.com.
###
Forward Looking Statements
This news release contains forward-looking statements that involve risks and
uncertainties. Forward-looking statements in this document and those made from
time to time by Viisage through its senior management are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements reflect the Company's current views with
respect to the future events or financial performance discussed in this release,
based on management's beliefs and assumptions and information currently
available. When used, the words "believe", "anticipate", "estimate", "project",
"should", "expect", "plan", "assume" and similar expressions that do not relate
solely to historical matters identify forward-looking statements.
3
Forward-looking statements concerning future plans or results are necessarily
only estimates and actual results could differ materially from expectations.
Certain factors that could cause or contribute to such differences include,
among other things, the size and timing of contract awards, performance on
contracts, performance of acquired companies, availability and cost of key
components, unanticipated results from audits of the financial results of the
Company and acquired companies, changing interpretations of generally accepted
accounting principles, outcomes of government reviews, developments with respect
to litigation to which we are a party, potential fluctuations in quarterly
results, dependence on large contracts and a limited number of customers,
lengthy sales and implementation cycles, market acceptance of new or enhanced
products and services, proprietary technology and changing competitive
conditions, system performance, management of growth, dependence on key
personnel, ability to obtain project financing, general economic and political
conditions and other factors affecting spending by customers, and the
unpredictable nature of working with government agencies. In addition, such
risks and uncertainties include, among others, the following risks: that
requisite Iridian shareholder approval will not be obtained, or that the pending
Iridian acquisition will not close or otherwise be delayed, that the pending
merger with Identix will not close, that the regulatory or shareholder approval
will not be obtained, that the closing will be delayed, that customers and
partners will not react favorably to the merger, integration risks, the risk
that the combined companies may be unable to achieve cost-cutting synergies, and
other risks described in Viisage's and Identix' Securities and Exchange
Commission filings, including the Registration Statement on Form S-4 filed with
the SEC in connection with the transaction, Viisage's Annual Report on Form 10-K
for the year ended December 31, 2005 and its Quarterly Report on Form 10-Q for
the quarter ended March 31, 2006 under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and Identix' Annual Report on Form 10-K for the year ended June 30,
2005 and its Quarterly Reports on Form 10-Q for the quarters ended September 30,
2005, December 31, 2005 and March 31, 2006 under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Viisage expressly disclaims any obligation to update any
forward-looking statements
Additional Information and Where to Find It
Investors and security holders of both Viisage and Identix are advised to read
the joint proxy statement/prospectus regarding the business combination
transaction referred to in the material below, when it becomes available,
because it will contain important information. Viisage and Identix expect to
mail a joint proxy statement/prospectus about the transaction to their
respective stockholders. This joint proxy statement/prospectus will be filed
with the Securities and Exchange Commission by both companies. Investors and
security holders may obtain a free copy of the joint proxy statement/prospectus
and other documents filed by the companies at the Securities and Exchange
Commission's web site at http://www.sec.gov. The joint proxy
statement/prospectus and such other documents may also be obtained from Identix
or Viisage by directing such requests to the companies.
Participants In Solicitation
Viisage, Identix and their respective directors and executive officers and other
members of management and employees may be deemed to be participants in the
solicitation of proxies in respect of the merger. Information concerning
Viisage's participants is set forth in the proxy statement dated, November 21,
2005, for Viisage's special meeting of shareholders held on December 16, 2005 as
filed with the SEC on Schedule 14A. Information concerning Identix' participants
is set forth in the proxy statement, dated October 6, 2005, for Identix' 2005
annual meeting of shareholders as filed with the SEC on Schedule 14A. Additional
information regarding the interests of participants of Viisage and Identix in
the solicitation of proxies in respect of the merger will be included in the
registration statement and joint proxy statement/prospectus to be filed with the
SEC.
5