L-1 sells its intell units before acquisition by BAE Systems

3-way M&A deal is orchestrated by Safran group

Safran, an international high technology group whose core businesses are aerospace, defense and security, is buying a scaled-down L-1 Identity Solutions Inc., after the sale of L-1’s intelligence units to BAE Systems Inc., according to company statements released today.

Safran will pay $12 in cash per share of stock, an aggregate enterprise value of approximately $1.6 billion, to purchase L-1’s Secure Credentialing Solutions, Biometric and Enterprise Access Solutions and Enrollment Services units, which are expected to have combined estimated fiscal 2010 revenues of $486 million.

The Paris-based enterprise plans to integrate the L-1 units into its Morpho subsidiary.

The Safran acquisition, which is expected to close in the first quarter of 2011, is subject to the prior consummation of the BAE Systems sale, stockholder approval, and other closing conditions, the statements said.

With more than 4,000 employees at 40 locations across 18 states, Safran sales to U.S. customers represented approximately $2.5 billion in 2009 revenue.

BAE Systems is paying $295.8 million to acquire L-1 Identity Solutions’ Intelligence Services Group, which is composed of SpecTal LLC, Advanced Concepts Inc., and McClendon LLC.

“The acquisition of SpecTal LLC, Advanced Concepts Inc., and McClendon LLC will significantly advance our offerings to the U.S. intelligence community,” said Linda Hudson, president and CEO of BAE Systems, in the BAE announcement.

She added that the acquisition will better position BAE Systems to offer government customers the security and intelligence support they need.

Upon closing, the more than 1,000 IT and security employees of SpecTal, Advanced Concepts and McClendon will join the BAE Systems Intelligence and Security sector, which is led by John Gannon and is based in Arlington, Va.

The proposed acquisition is conditional, among other things, upon receiving certain U.S. regulatory approvals. It is expected to close in the fourth quarter of 2010.

BAE Systems, of Rockville, Md., ranks No. 15 on Washington Technology’s 2010 Top 100 list of the largest federal government contractors.

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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