Gemalto to acquire Xiring banking activity
Thursday 3 December 2009 at 14:33 :: #266
Gemalto announced that they have entered into exclusive negotiations with the objective to complete the acquisition by Gemalto of the Xiring banking activity. The proposed transaction concerns all of the current activities of the banking business unit of Xiring, with all the associated products, IP and technologies, as dedicated to EMV based strong authentication solutions for e-banking and e-commerce. The transaction is expected to be completed by year end.
In the past, Gemalto had been a shareholder of Xiring, for historical reasons: When Xiring had been created in 1998, Bull CP8 was one of its investors. Then Bull CP8 was acquired by Schlumberger, which evolved into Axalto, and later merged with Gemplus to form Gemalto (cf. Smart Insights Weekly #07-13). During the merger process between Axalto and Gemplus, the participation into Xiring had been the object of a remark by the AMF (Autorité des Marchés Financiers – French Stock Exchange regulatory authority) as some of originally Gemplus activities could come in competition with Xiring's. In Q1/2007, Gemalto sold 527 607 Xiring shares, a value of approximately EUR 5.4 million, to institutional investors.
Xiring is a major player in the field of EMV based strong authentication solutions for e-banking and e-commerce. The combination of the banking activity from Xiring with its own, would position Gemalto as a leader in EMV based strong authentication solutions for e-banking and e-commerce. Xiring announced a few months ago it estimated a total of 21 million bank card based strong authentication solutions had been delivered in Europe to replace the static password for online banking services and to secure e-commerce payments. Of these, Xiring had issued more than 10 million solutions by end of 2008 (cf. SIW #09-16).
Xiring recently posted negative sales figures for Q3/2009: EUR 4.4 million (-29.2% compared with Q3/2008), and for the first nine months of 2009: EUR 16.2 million, compared with EUR 19.1 million for the same period in 2008 (-15.2%) (cf. SIW #09-43). Banking activities account for a large part of this drop : for the first nine months of 2009, the turnover generated by the Banking activities with strong authentication solutions based on bank cards reached EUR 5.3 million, compared with EUR 9.7 million for the same period in 2008, i.e., -45.5%. When announcing its Q3 results, Xiring mentioned the postponement of certain programs as the reason for this drop.
After completion of the agreement, Xiring will concentrate on its healthcare related activities, which have recently been shown as a growth source : the turnover for the first nine months of 2009 for the healthcare related activities was EUR 10.4 million compared with EUR 7.8 million for the same period in 2008, representing a 33.7% increase. Xiring has historically been a major player in the French healthcare market, as the company supplies a full range of tools for the Sesame Vitale application, including the widely spread “le point Xiring”. Recently, Xiring attempted to enter the German Healthcare market with its "Xi-Plus 5" mobile terminal for healthcare professionals (cf. SIW #09-28).
Xiring has also a small activity covering general purpose readers such as its “Teo by XIRING”, recently adopted by SNCF in the context of a home top up of Navigo passes (cf. SIW #09-40).