Idemia: for sale

The rumor had already been running for a while: Advent, the investment fund that acquired OT and Morpho, and structured Idemia in 2017 would not keep it forever. Now, it is official! Or almost official: Reuters just published a report saying that Advent International was looking to sell Idemia for US$ 4.6 billion (EUR 4.05 billion).

Advent is said to consider splitting the company in two, separating the "government business," valued at EUR 3 billion from the "enterprise business," which includes SIM cards, payment cards and all non-government related activities, valued at EUR 1 billion.

Advent acquired a 90% majority in Oberthur Technologies in 2011 for EUR 1.15 billion; the Savare family at that time keeping 10%, which were later transmitted to BPI, the French government investment bank. The new company had been formed in September 2017. At that time, Advent International, which already owned Oberthur Technologies had been able to complete the purchase of Morpho (Safran Identity & Security) for EUR 2.4 billion. On September 28, 2017, the name Idemia was announced to replace OT-Morpho. Advent said at the time they already had investments in the same sector, in Vantiv (US), WorldPay (UK), Monext (France) and Mach (Luxembourg). Now, Advent has also added Nets, a major North European payment processor, Concardis, a German provider of merchant services and Euronet, a leader in ATM operation, among others to its portfolio.

In 2020, Idemia revenue reached EUR 2.2 billion. The company is organized in two parts:

"Government solutions," which include:

• "Public security and identity," covering government ID document and readers, public security systems, speed check devices, and

• "Security and identity N.A." covering the specificities of the North American markets, such as PIV cards, RealID driving license, ….

"Enterprise solutions," which include:

• "Financial services," including payment cards and biometrics, personalization, enrolment, and mass transit payment,

• "Connectivity services," which covers SIM cards, eSIMs, mobile onboarding ad authentication, IoT security and PayTV, and

• "Access control," which covers all aspects of physical and digital access control as well as vehicle access.

According to Reuters, Thales is said to have expressed interest in acquiring any cyber-security asset that could be up for sale, but if we remember the tedious process Thales had to go through for Gemalto acquisition, one hardly sees how an acquisition of Idemia divisions by Thales could reach a conclusion as it would create a dominant position.

The perimeter of the secure transactions industry might be increasingly harder to define. We were used to have two major players Thales and Idemia, and a third contender G&D, leading the pack of smaller vendors. Whatever the result Idemia sale or its break up, it will transform the secure transactions industry.