SCM Microsystems completes merger with Hirsch Electronics
6 May 2009
SCM Microsystems, Inc. (NASDAQ: SCMM; Prime Standard, SMY), based in
Ismaning, Germany, has announced that it has closed its merger with
Hirsch Electronics Corp. The shareholders of both companies
overwhelmingly approved the transaction.
Hirsch is now a wholly-owned subsidiary of SCM. Each company’s
products and services will continue to be marketed, sold and supported
using their existing brand names.
“We see this merger as the completion of another milestone in the
successful business relationship that SCM and Hirsch have been building
together,” said Felix Marx, chief executive officer of SCM Microsystems.
“We decided to combine two industry leaders into a single powerhouse
because we see the market developing in the same way, we focus on
serving our customers in the same way, and we already know how to work
Acquiring Hirsch, a physical access solution provider and re-seller
of SCM’s physical access readers, nearly doubles the size of SCM. SCM is
a leading global provider of readers that enable people to access PCs
and networks with smartcards containing authentication data and other
information. This is known in the industry as 'logical access'.
Hirsch was a pioneer of the access control market and is now a top
player in what is known as 'physical access' — secure entry to
buildings, campuses, military installations and other facilities.
Following the merger, Lawrence Midland, Hirsch’s CEO and president
and a director of Hirsch, has joined the Board of Directors of SCM and
has also been named an executive vice president of SCM, heading up the
new Hirsch business division.
Also joining SCM’s board is Douglas Morgan, a former director of
Hirsch who was instrumental in launching Hirsch as a company and in
developing Hirsch’s core technology. With the recent departure of Dr
Hagen Hultzsch and Stephan Rohaly from the Board, SCM’s Board of
Directors now consists of seven members, who together have substantial
and broad experience in the US and European technology markets.
Lawrence Midland commented, “As a combined company, we now have an
exceptional opportunity to deliver a broader and more complete set of
solutions to address the growing market trend of convergence – single,
integrated authentication systems that include both logical and physical
access. The Hirsch team is excited to join SCM and to participate in the
expansion and growth of our combined business.”
The merger also provides SCM with additional scale and resources to
develop, sell and support new products, systems and services to address
the growing global appetite for secure authentication solutions to
enable ecommerce, egovernment and ebusiness.
In particular, SCM is focused on another global market opportunity:
authentication via “contactless” smart cards and tokens. Among its other
benefits, contactless authentication enables consumers around the world
to make daily small purchases simply by holding up a card, token or
mobile phone equipped with contactless logical access technology.
“Convergence and contactless are bigger opportunities that need
bigger suppliers to fulfill them,” Marx commented. “We are already
talking with some of the best-known global brands in communications and
electronics about next-generation products and services. These companies
understand and appreciate our strategy of building up our size and scale
while continuing to deliver standards-based solutions. Their plans and
programs depend on technology providers who can not only keep up with,
but anticipate their needs.”
The success of SCM’s strategy is also becoming evident in
public-sector authentication schemes. The Company is already producing
and shipping specially designed products for Germany’s national “ehealth”
initiative, which will give doctors and patients fast, reliable and even
mobile access to secure health information. Similar national programs
are in development or implementation around the world. In the U.S.,
Hirsch has included SCM products in its solutions for large-scale
authentication projects involving the military and government agencies.
The merger of the two organizations is expected to require little
integration because their existing operations are highly complementary,
with little overlap. “For a variety of very practical reasons, we
believe this combination has a high chance of success,” Marx noted. “We
have already begun to execute on the opportunity internally, and are
excited to be able to do even more for our customers than ever before.”
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