ST. PAUL, Minn. & PASADENA, Calif--3M NYSE:MMM, and Cogent Inc. NASDAQ:COGT announced today 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.
“3M can accelerate our growth and extend our reach in global border
control markets, law enforcement and commercial applications”
The agreement provides for a subsidiary of 3M to commence a tender offer
to purchase all outstanding shares of Cogent Systems within ten business
days.
The Board of Directors of Cogent Systems has unanimously recommended
that the shareholders of Cogent Systems accept the offer and Mr. 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 of the year.
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.”
On a GAAP reported basis, 3M estimates the acquisition to be $0.09 to
$0.10 dilutive to earnings in the first 12 months following completion
of the transaction. Excluding purchase accounting adjustments and
anticipated integration expenses, 3M estimates the acquisition to be
$0.01 to $0.02 accretive to earnings over the same period. First year
EBITDA, excluding purchase accounting and integration costs, is expected
to be approximately 35 percent-to-sales.
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 United Kingdom. Cogent Systems would be part of 3M’s Security
Systems Division. Ming Hsieh will remain an integral part of the
combined business going forward.
J.P. Morgan acted as exclusive financial advisor to 3M; Credit Suisse
and Goldman, Sachs & Co. acted as financial advisors to Cogent Systems.
Additional Information
The tender offer described in this news release has not yet been
commenced. This announcement and the description contained herein is
neither an offer to purchase nor a solicitation of an offer to sell
shares of Cogent Inc. At the time the tender offer is commenced, 3M and
its wholly-owned subsidiary, Ventura Acquisition Corporation, intend to
file a Tender Offer Statement on Schedule TO containing an offer to
purchase, forms of letters of transmittal and other documents relating
to the tender offer and Cogent Inc. intends to file a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to
the tender offer. 3M, Ventura Acquisition Corporation and Cogent Inc.
intend to mail these documents to the stockholders of Cogent Inc. These
documents will contain important information about the tender offer and
stockholders of Cogent Inc. are urged to read them carefully when they
become available. Stockholders of Cogent Inc. will be able to obtain a
free copy of these documents when they become available and other
documents filed by Cogent Inc., 3M or Ventura Acquisition Corporation
with the SEC at the website maintained by the SEC at www.sec.gov.
In addition, stockholders will be able to obtain a free copy of these
documents when they become available from the information agent named
in the offer to purchase or from 3M.
Forward-Looking Statements
This news release contains forward-looking statements that involve
risks, uncertainties and assumptions. If such risks or uncertainties
materialize or such assumptions prove incorrect, the results of 3M,
Cogent Inc. and their consolidated subsidiaries could differ materially
from those expressed or implied by such forward-looking statements and
assumptions. All statements other than statements of historical fact are
statements that could be deemed forward-looking statements, including
statements about the expected terms of the proposed acquisition; the
ability to complete the proposed transaction; the expected benefits and
costs of the transaction; management plans relating to the transaction;
the expected timing of the completion of the transaction; any statements
of the plans, strategies and objectives of management for future
operations, including the execution of integration plans; any statements
of expectation or belief; and any statements of assumptions underlying
any of the foregoing. Risks, uncertainties and assumptions include that
the transaction may not be timely completed, if at all, upon favorable
terms; the possibility that expected benefits may not materialize as
expected; that, prior to the completion of the transaction, Cogent
Inc.’s business may not perform as expected due to transaction-related
uncertainty or other factors; that 3M is unable to successfully
implement integration strategies; and other risks that are described in
3M’s and Cogent Inc.’s SEC reports, including but not limited to the
risks described under “Risk Factors” in Part I, Item 1A of the Annual
Report on Form 10-K for its fiscal year ended December 31, 2009 and in
Part II, Item 1A in the Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 2010 and June 30, 2010. 3M and Cogent Inc.
assume no obligation and do not intend to update these forward-looking
statements.
About Cogent Systems
Cogent Systems is a global biometric identification solutions provider
to governments, law enforcement agencies, and commercial enterprises.
Cogent Systems provides the highest quality identification systems,
products and services with leading technology, accuracy and speed.
Cogent Systems’ 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. For more information, please
visit www.cogentsystems.com.
About 3M
A recognized leader in research and development, 3M produces thousands
of innovative products for dozens of diverse markets. 3M’s core strength
is applying its more than 40 distinct technology platforms – often in
combination – to a wide array of customer needs. With $23 billion in
sales, 3M employs 75,000 people worldwide and has operations in more
than 65 countries. For more information, visit www.3M.com,
or follow at 3MNews on Twitter.
