SCM Microsystems, Bluehill ID Agree to Combine in All-Shares Transaction

SCM Microsystems, Inc. and Bluehill ID AG announced they have entered into an agreement to combine their respective companies, subject to certain regulatory and shareholder approvals.

Under the agreement, SCM will make an offer to the Bluehill ID shareholders to acquire all shares of Bluehill ID. Shareholders of Bluehill ID who accept and tender their shares in the offer are expected to receive 0.52 shares of SCM’s common stock for every one share of Bluehill ID.

If all of the Bluehill shareholders accept the offer and SCM acquires 100% of the outstanding Bluehill ID shares, approximately 60% of the outstanding shares of the combined company would be held by the current SCM stockholders and approximately 40% of the outstanding shares of the combined company would be held by the current Bluehill ID shareholders.

Both companies are focused on access control, identity management and RFID technologies and markets.SCM currently operates under the SCM and Hirsch brands while Bluehill ID currently operates under the Multicard, TagStar, Arygon, Syscan and ACiG brands, all covering the RFID and smart card value chains.

SCM Microsystems is a global leader in security and identity solutions for secure access, secure identity and secure exchange. Together with its Hirsch Electronics subsidiary, SCM offers one of the world’s broadest range of contact, contactless and mobile smart card reader technology, digital identity and transaction platforms, as well as systems that integrate physical and logical access control.

SCM’s 225 employees are based at its global headquarters in Ismaning, Germany, its U.S. headquarters in Santa Ana, CA, its dedicated research and development facility in Chennai, India and at regional sales offices in Washington DC, Tokyo, Hong Kong and Milan.

Bluehill ID is focused on building the world’s leading group in identification (ID) technology offering leading edge products and services across the identification/RFID value chain. Founded in 2007, the company is comprised of five operational units – Multicard, TagStar, Arygon, ACiG and Syscan ID with 97 employees based in Europe, Northand South America, India and Australia.

“Following on the heels of our recently completed merger with Hirsch Electronics, the combination with Bluehill ID further advances our strategy of expanding our position in contactless markets and technology,” said Felix Marx, CEO of SCM Microsystems. “It offers us entry into the important RFID transponder technology market, strengthens our e-passport and national ID business, and helps us expand into important growth verticals. Bluehill ID’s broad geographic reach complements ours very nicely; our combined business will be more diversified and balanced globally.

“In a highly fragmented, technology driven growth industry, Bluehill ID’s technology, market reach and brands coupled with the strength of our combined management team and industry vision will immensely accelerate our strategic plans,” Marx added.

Larry Midland, executive vice president of SCM Microsystems and president of Hirsch Electronics added, “We brought Hirsch and SCM together to accelerate growth into new markets in ID convergence, and to get better access to solutions and resources. We know the Bluehill ID team very well and Ayman Ashour was previously a member of the Hirsch Electronics board of directors. The pace of growth and development of Bluehill ID has been very notable and their tremendous strength in a disciplined and methodical ‘buy, build and grow’ strategy has clearly delivered very impressive results. I am particularly happy to see the potential synergies between all our companies and feel that this is a winning combination for all stakeholders.”

“The combination of SCM and Hirsch made tremendous industrial sense, SCM is now the first company in the world able to offer truly converged physical and logical access control and ID management solutions,” Ayman S. Ashour, CEO of Bluehill ID commented. “We see this as bringing unique and significant value to our own strategy. When Bluehill ID was formed we had the clear vision of wanting to be the signature company in secure RFID and identity management. Together with SCM, we now will be able to come much closer to achieving that vision, with an industry leading platform, strong businesses and a tight, coherent team.”

In accordance with the terms of the combination agreement and following the completion of the business combination, a new corporate identity will be developed for the combined company that will better represent its core activities in security and identification technology. At the same time, the individual operating businesses of the new combined company are expected to continue using their existing brands, which include SCM, Hirsch, Multicard, TagStar and Arygon. The combined company will be led by Marx as CEO and Ashour as executive chairman of the board. In addition to Ashour, Bluehill ID will nominate two members to the SCM board. The transaction is currently expected to close in the next 180 days.