TUALATIN, Ore. - Digimarc Corporation is acquiring Polaroid Corporation's ID Systems business, headquartered in Bedford, Massachusetts. The ID Systems business is one of several business units within Polaroid Corporation and is operated as a separate division. The division produces 60 million secure personal identity cards per year, including the drivers licenses of 36 U.S. states and other government identification documents around the world. The purchase price for the acquisition is $56.5 million in cash plus the assumption of certain liabilities and expenses. The ID Systems business employs approximately 300 people, generates in excess of $50 million in annual revenues, and is profitable on a pro forma standalone basis.
Digimarc was announced as the winning bidder for the ID Systems business in an auction conducted by Polaroid Corporation and other related debtor parties on November 29 and 30, 2001, pursuant to sale procedures approved by the United States Bankruptcy Court for the District of Delaware. The transaction is subject to the parties entering into a definitive agreement for the purchase of the assets and approval of the transaction by an order of the United States Bankruptcy Court for the District of Delaware, as well as expiration of applicable waiting periods pursuant to the Hart Scott Rodino antitrust review provisions. The ID Systems business will become Digimarc ID Systems, a wholly owned subsidiary of Digimarc Corporation.
"The acquisition of Polaroid Corporation's ID Systems business has many significant benefits: financially, it will substantially increase Digimarc's revenues, improve cash flow, and accelerate our progress toward profitability. Strategically, the skill, experience, and expertise of the ID Systems business employees, and the company's technological leadership in ID card design and manufacturing, secure systems, biometrics, image-processing, materials science, chemistry, and systems integration, will broaden and enrich our product offerings and technology portfolio. The acquisition positions Digimarc as a global leader in identity systems, an area of security in which we've done considerable research and development for several years, and one in which there has been a surge in interest in the past few months. We intend to apply our patented digital watermarking technology to enhance the security and usefulness of drivers licenses and other products produced by our new ID Systems business, enhancing the value and competitive differentiation of ID Systems' products and substantially advancing the adoption of digital watermark applications," said Bruce Davis, Digimarc CEO.
Davis further noted that "this acquisition is another building block in the continuous progress of our vision to create an inherent, persistent digital identity for all media content via digital watermarking that enables better protection of copyrights, increased security, and other benefits. It is a natural extension of our long-term relationships with leading central banks and security printers relating to deterring the use of personal computers in counterfeiting currency and other value documents, and complements our growing involvement in national defense and intelligence markets. The timing for this acquisition is very favorable, as concern about security of personal identification has escalated to unprecedented heights."
The new Digimarc subsidiary will be headquartered in Bedford, Massachusetts, with a second facility located in Fort Wayne, Indiana. The new subsidiary will report to Digimarc's President and COO, Paul Gifford.
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