L-1 to buy Digimarc's ID assets

L-1 Identity Solutions Inc. will purchase the identification systems business that belongs to Digimarc Corp. for $250 million in a cash and stock deal.

The agreement calls for Digimarc stockholders to receive about 50 percent of the purchase price in shares of L-1 stock and the other 50 percent in cash.

Digimarc stockholders also will receive shares in a new company bearing the Digimarc name. That company will consist of Digimarc's digital watermarking business.

The acquisition will enable L-1 to combine Digimarc's expertise in centralized production of credentials with L-1's capabilities in biometric recognition and document authentication capabilities, said Robert LaPenta, L-1's chairman and chief executive officer.

As a result, L-1 will be able to offer customers a comprehensive array of services for issuing government credentials such as driver's licenses, he said.

When the transaction closes, L-1 said it expects to have revenues of about $670 million. The deal is expected to close in the second half of 2008.

Digimarc is based in Beaverton, Ore. L-1, which is headquartered in Stamford, Conn., offers products and solutions for protecting and securing personal identities and assets.