Amid Stabilizing Market Conditions, Advent Looks to Seal a Deal for Idemia’s Identity Business

Advent International is in exclusive negotiations to sell Idemia’s European identity authentication business, known as Idemia Smart Identity, to IN Groupe, a Paris-based company wholly owned by the French government.

While financial details have not been disclosed, a Bloomberg News report from March indicated that the Idemia unit could be valued at up to €1 billion ($1.1 billion). The deal is expected to be completed next year, pending consultations with employee representatives and regulatory approvals.

Idemia was formed in 2017 when Advent International acquired Safran SA’s identity and security business and merged it with Oberthur Technologies, a company it had purchased in 2011. Reports emerged of Advent’s plans to sell the company in 2022, with Idemia rival Thales floated as a potential buyer. Reports at the time suggested that the entire company could be sold for $4.6 billion, or that it could be sold in parts, with Idemia’s enterprise-focused businesses valued at around €1 billion.

A follow-up report in the late summer of 2022 suggested that Advent was hoping to fetch about €3 billion for Idemia’s “biometrics and ID business”. But Advent was putting together the deal at a tumultuous time in terms of market conditions. After a flush of capital into global markets to cope with the COVID-19 pandemic in 2020 and 2021, concerns about war in Europe and inflation became salient in 2022, with stock indexes plummeting and central banks beginning to hike interest rates.

It is perhaps no surprise that news of an imminent Idemia sale has popped back up in the same week that the U.S. Federal Reserve announced its first interest rate cut since the hike cycle began in 2022. Market conditions appear to be returning to dynamics that would encourage growth in tech and other areas.

Idemia, meanwhile, has undergone some big changes. Earlier this year, the company was reorganized into three distinct divisions: IDEMIA Secure Transactions (IST), which is focused on payment and connectivity technologies; an IDEMIA Public Security (IPS) Division; and IDEMIA Smart Identity, which is now on the chopping block with respect to the planned sale. Idemia’s U.S. operations were later separated from its European business in another reorganization.

IN Groupe, meanwhile, is a major player in identity technology in its own right. Formerly known as Groupe Imprimerie Nationale, has been a partner to the French government for nearly five centuries. The company offers a range of biometric-enabled products and services, including electronic passports, identity cards, and authentication systems for various sectors such as government, banking, and transportation.

Its biometric solutions encompass multiple applications, from passwordless authentication and digital signatures to secure access control and border management. IN Groupe’s border biometrics have demonstrated robustness against spoofing attempts, having passed FIDO PAD testing.

In facilitating the transaction, Goldman Sachs Group Inc. and Rothschild & Co. acted as financial advisers to Idemia, while Lazard Inc. served as the financial adviser to IN Groupe.

Source: BNN Bloomberg

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September 20, 2024 – by Cass Kennedy and Alex Perala