Sunday, January 15, 2006

Hit #75

Identix (IDNX) is being acquired by Viisage in a stock-transaction, valuing Identix at around $8.34/share. The offer represents a premium of 32% over my average cost of $6.34/share.

Identix is known for its fingerprint id and facial recognition technology, while Viisage was focused only on the latter. The combination will now create a powerful biometrics player. The markets recognised that and Viisage stock surged ahead, but not before a day of dumping following the merger.

The combined entity will itself be a target down the road for one of the defense majors. Companies like General Dynamics, Honeywell, Tyco and GE will look to enter this civilian security sector.

Other players worth watching in this sector are Digimarc (DMRC) and Cogent (COGT). The latter went public recently, and the Identix/Viisage announcement resulted in a pullback in the shares creating a buying opportunity. There is room for more than one player in this market in a post-9/11 insecure world. Digimarc leads in the secure identity cards market - everything from tamper-proof driver's licenses to social-security/national-id/travel documents.

I own shares in Digimarc. Digimarc and Cogent are both worth buying now.

Previous hit - Tommy Hilfiger (#74)


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