ASSA ABLOY acquires HID - world leader in identification technology for access control
A traditional lock system is a mechanical access control system consisting of identification - the key, and the blocking mechanism - the lock. In an electronic access control system the identification is done through cards and readers and the blocking mechanism is the electromechanical lock.
The electronic identification has so far been a missing link in ASSA ABLOY's product portfolio of mechanical and electromechanical locks. It has become increasingly interesting and important to take a leading position also in this fast growing segment.
The progress being made within mobile communication technology and miniaturized electronics creates opportunities for the development of more intelligent locks, even remotely controlled. Radio frequency identification technology is core in such a development.
In 1991, Hughes Identification Devices (HID) started as a subsidiary of Hughes Aircraft Company. HID was part of a management buy-out in 1995, backed by Citicorp Venture Capital and led by former executives from IBM and Hughes.
HID has a strong reputation for innovation and for the development of leading-edge technology. The company has made significant investments in its R&D, in particular in Radio Frequency Identification Technology, RFID, much of which is protected by patents. 70% of all new access control systems sold in the world today are based on contact-less reading and HID's market share is 40%.
HID's sales are expected to reach USD 100 M. Compounded average growth rate over the last six years is 50%. During this entire period, the company has shown strong profit and cash flow. The EBIT margin is well in line with the electromechanical companies that have recently been acquired by ASSA ABLOY. The electronic access control market is growing at 10-15% annually. HID has benefited from this growth and at the same time gained market share with its own technology. HID is expected to continue to show good growth driven by the growth in the access control market as well as by launching new products based on HID's RFID technology.
The company's headquarters is located in Irvine, California and the R&D Center in Denver, Colorado There is also a production facility in North Haven, Connecticut and a number of sales companies overseas. The total number of employees is 350.
Pro forma effects
The acquisition price for a debt free company amounts to USD 250 M. An additional earn-out of USD 30 M will be paid dependent on the profit improvement next. The goodwill will amounts to USD 215 M. The acquisition is expected to be cash positive from the start. It will be neutral or slightly EPS delutive in 2001, and will contribute from 2002.
The acquisition will be financed through the existing credit facility.
The acquisition of HID will be subject to regulatory approvals.
For further information, please contact:
Carl-Henric Svanberg, President & CEO, tel: +46 8 506 485 52 or +46-70-510 0551,
The ASSA ABLOY Group is the world's leading manufacturer and supplier of locks and associated products,
dedicated to satisfying end-user needs for security, safety and convenience. Current sales for the Group are in excess of
18 billion SEK (approximately 2 billion USD) and the number of employees is approximately 20,000.
ASSA ABLOY is the global leader in door opening solutions and offers mecahnical and electromechanical locks, digital door locks, security doors, entrance automation, hotel security and secure identity solutions, primarily in identity and access management, as well as a number of other related products and services.
Since its formation in 1994, ASSA ABLOY has grown from a regional company into an international Group with some 47,500 employees operating in more than 70 countries and sales of SEK 76 billion.