3M to Acquire Cogent Inc.

3M and Cogent Inc. announced that they have entered into a definitive agreement for 3M’s acquisition of Cogent Inc. for $10.50 per share.

The proposed transaction has an aggregate value of approximately $943 million, or approximately $430 million net of cash acquired. Cogent Inc., commonly referred to as Cogent Systems, provides finger, palm, face and iris biometric systems for governments, law enforcement agencies and commercial enterprises.

The agreement provides for a subsidiary of 3M to commence a tender offer to purchase all outstanding shares of Cogent Systems within 10 business days.

The Board of Directors of Cogent Systems has unanimously recommended that the shareholders of Cogent Systems accept the offer and Ming Hsieh, Cogent Systems’ founder and CEO, and certain entities affiliated with him have agreed to tender their shares to the offer. The offer will be subject to the tender of a majority of Cogent Systems’ shares and to certain other customary closing conditions. The transaction is expected to close during the fourth quarter.

Cogent Systems participates in the $4 billion global biometric market, which is projected to grow at a rate greater than 20 percent per year. Its Automated Fingerprint/Palmprint Identification Systems, or AFIS, enable customers to capture fingerprint and palm print images electronically, encode prints into searchable files, and accurately compare a set of fingerprints/palm prints to a database containing potentially millions of prints in seconds.

“Cogent Systems has done a tremendous job establishing a strong presence in the biometric industry,” said Mike Delkoski, vice president and general manager, 3M Security Systems Division. “Adding Cogent Systems’ products to our business strengthens our product portfolio and services in high security credential issuance and authentication systems and positions 3M’s business in law enforcement applications. It also expands our reach into access control and other commercial ID and authentication applications.”

Identification and authentication solutions from 3M include border management products; document manufacturing and issuance systems for IDs, passports and visas; document readers and verification products; and security materials, such as laminates, to protect against counterfeiting and tampering.

“3M can accelerate our growth and extend our reach in global border control markets, law enforcement and commercial applications,” said Hsieh. “Together, we’ll deliver a broader range of identification and authentication solutions to the security industry and to our customers.”

With approximately $130 million in revenue in 2009, Cogent Systems is based in Pasadena, Calif., and employs approximately 500 people. The company has operations in Ohio, Virginia, Austria, Canada, China, and the UK. Cogent Systems would be part of 3M’s Security Systems Division. Hsieh will remain an integral part of the combined business going forward.