Orange County Business Journal

Stock Sale

Security Device Maker Identive Sells Shares; Wild Stock Swing With NXP Deal, Offering Michael Lyster Sunday, May 29, 2011

IDENTIVE GROUP INC.

Santa Ana

Business: building, networking security, other products

Market value: $125 million

Projected 2011 revenue: $105.4 million, up 24%

Projected 2011 profits: $484,000, versus $9 million loss

Santa Ana’s Identive Group Inc., a maker of scanners, readers, cards and other security devices for buildings and computers, raised more than $20 million before fees in a stock sale last week.

Identive sold about 9 million shares at $2.55 each, raising some $23 million before paying investment bankers, lawyers and regulatory fees.

The company plans to use the proceeds “to fund continued growth, acquisitions, working capital and general corporate purposes.”

Earlier this month, Identive bought most of Pleasanton-based idOnDemand Inc. in a deal that could be worth as much as $27 million.

IdOnDemand provides online security access to buildings, computers, mobile devices and corporate networks.

Products

In Santa Ana, Identive specializes in designing and making devices for what’s called physical access—security systems that let only certain people inside a building.

The company’s products are big on biometrics, or using fingerprint or eye scans to verify identity.

Customers include federal, state and local governments here and abroad. The company also sells to hospitals, schools and utility companies.

Identive had 2010 sales of about $85 million and is working toward profitability after a string of losses.

Wild Swing

The company’s shares, which have a market value of about $125 million, saw a wild swing on Wall Street last week, spurred by a deal and then plunging on the share sale.

Identive’s stock was up as much as 20% early last week on a deal struck with NXP Semiconductors of the Netherlands. NXP plans to offer Identive’s security products to its customers.

Identive’s shares then fell about 10% on word of the stock sale as investors feared dilution of profits reported on a per share basis.

The stock, which sees about 1.5 million shares traded daily on average, has spiked on and off for the past month or so.

Cowen Group Inc. and Morgan Joseph TriArtisan LLC, both of New York, handled Identive’s stock sale.

The investment banks had access to 1.2 million additional shares to meet extra demand.

In April, Identive filed for permission from regulators to offer stock and debt from time to time.

The filing allows Identive to raise up to $100 million by selling various forms of shares and debt.

History

The company came to have its headquarters here by way of an acquisition.

In 2009, predecessor Santa Ana-based Hirsch Electronics Corp. was bought by Germany’s SCM Microsystems Inc., a maker of smart card readers, for about $14 million.

Identive was formed in 2010 when SCM Microsystems combined with Switzerland’s BlueHill ID AG in a deal that ended with BlueHill holding 40% of SCM’s shares.

The newly combined company changed its name to Identive. Its shares trade on Nasdaq and on the Frankfurt Stock Exchange.

Identive’s operational headquarters is north of Munich with Santa Ana as its on-the-books corporate headquarters.

The Santa Ana operation, which has about 100 workers, includes an office and a 20,000-square-foot factory.