AuthenTec (NASDAQ: AUTH), a leading provider of security, identity management and touch control solutions, and privately-held UPEK, a leading supplier of fingerprint solutions for consumer, business and government applications, announced that the companies have combined, creating the world's largest provider of fingerprint sensors and identity management software, as well as biometric and embedded security solutions. AuthenTec will remain headquartered in Melbourne, Florida and will be led by newly named CEO Larry Ciaccia, who previously served as AuthenTec's President and Chief Operating Officer.
“I look forward to working with our Board of Directors, our management and the rest of our newly expanded team as we continue executing on our business strategies and goals.”
Positioned for Profitability and Growth
This merger establishes AuthenTec as the industry leader with significantly greater scale, an increased customer footprint and broader market diversity, thereby enhancing opportunities for future revenue growth and profitability. The combined company will benefit from AuthenTec's leadership position in the PC and wireless markets as well as in embedded security, and from UPEK's software expertise, presence in the PC and wireless markets and leadership in government biometrics. AuthenTec will now be able to provide customers a broader portfolio of smart sensor hardware and identity management software as well as embedded security solutions.
"The combination of AuthenTec and UPEK creates the leading provider of security, identity management and touch control solutions with the scale and customer diversity to accelerate the achievement of our growth and profit objectives," said Larry Ciaccia. "Together, we are able to achieve enhanced profitability through synergistic cost reductions, gain depth and expertise as an expanded global team advancing our technology and product roadmaps, and add to an unmatched patent portfolio. By combining with UPEK, we gain a team with a proven track record in biometrics, a large installed base for its Protector SuiteTM software application, a higher margin government biometric business, and a leading position with a top five PC OEM. We are confident that this merger represents the best interests of our combined base of global customers, employees and shareholders."
"The UPEK team is very pleased to join AuthenTec and together continue to build on our leadership in identity management technologies for commercial, consumer and government markets," said UPEK Chairman and CEO Dr. Ronald Black. "AuthenTec will now have expanded opportunities in government and PC markets as well as enhanced biometric software expertise and complementary fingerprint sensor/security technology. The result is a market leader with higher revenue, a more diverse product offering, greater market and customer diversity, and an expanded patent portfolio."
UPEK had 2009 revenue of $18.0 million and $11.7 million in revenue (unaudited) in the first half of 2010 (ending June 30, 2010). The combined company is expected to generate in excess of $10.0 million in cost synergies in 2011. The transaction, on a non-GAAP basis, is expected to be accretive to AuthenTec's earnings per share by the second quarter of 2011, and the combined company expects to be profitable, on a non-GAAP basis, by the third quarter of 2011. AuthenTec will have the size, resources and market leadership to execute on its strategy of becoming a solutions provider while accelerating growth in its target markets. The Company now offers the broadest portfolio of smart sensors for the PC, wireless, access control and government markets, multiple USB fingerprint readers, PC identity management software for enterprises (Protector Suite™) and consumers (TrueSuite®), and a comprehensive embedded security IP portfolio. With the addition of UPEK patents, AuthenTec further expands its intellectual property to nearly 200 issued and filed U.S. patents, the largest patent portfolio in the industry today.
Terms of the Transaction