Digital security company Gemalto has agreed to purchase the identity management business of 3M (NYSE: MMM) for $850 million in a push to expand government programs technology offerings for the commercial biometrics market.
Gemalto said Friday it expects the transaction to close in the first half of 2017 pending regulatory approvals and will integrate 3M’s identity management business with the company’s government programs segment — which generated $413 million in 2015 revenue.
“3M’s identity management business and Gemalto perfectly fit, solving authentication and identity management pain points across our customer segments, creating immediate increased differentiation and offering additional long term growth perspectives, ” said Gemalto CEO Philippe Vallee.
3M’s identity management business includes 3M Cogent that works to provide biometric platforms in the areas of law enforcement, civil identification and border control as well as document reader and secure materials businesses.
The 3M identity management business has approximately 450 employees and recorded $215 million in annual revenue and $58 million in operations-related profits in its last fiscal year ending June 2016.
Gemalto expects the deal to be accretive to earnings per share in the first year and will fund the transaction with cash and existing credit facilities.