SCM Microsystems and Hirsch Electronics to Merge
December 11 2008 - 3:46AM
PR Newswire (US)
Combination creates new leader in converged security solutions for
physical and logical access ISMANING, Germany and SANTA ANA,
Calif., Dec. 11 /PRNewswire-FirstCall/ -- SCM Microsystems, Inc.
(Nasdaq: SCMM; Prime Standard, SMY) and Hirsch Electronics Corp.
today announced they have entered into a definitive agreement to
merge. The combination of SCM and Hirsch is expected to result in a
new security products leader at a time of escalating market demand
for converged security solutions leveraging smart cards and smart
chip-enabled devices. Pursuant to the proposed merger, the security
holders of Hirsch will receive a combination of cash, SCM common
stock and warrants to purchase shares of SCM common stock, with
total consideration based on the price of SCM common stock at the
time of closing. The combination of SCM, a leading global provider
of smart card-based logical access readers, and Hirsch, a top
player in the physical security industry and a pioneer in the
electronic access control market, will provide customers with a
more comprehensive and powerful set of solutions for linking
physical (e.g., building) and logical (e.g., PC and network) access
control across the enterprise. Together, the two companies will be
better positioned to meet a broader set of customer needs,
strengthen their market presence globally, leverage existing
distribution channels and achieve an operational scale to
accelerate growth into new markets. "This merger essentially
doubles the size of our company and brings significant benefits to
our customers, shareholders and employees," commented Felix Marx,
chief executive officer of SCM Microsystems. "Customers worldwide
are calling for converged solutions for information security and
physical access control, and that is creating demand for a broad
set of devices from doors to desktops with support for smart cards,
biometrics and contactless technologies. By combining our
respective product lines and resources we can address the full
spectrum of customer needs, making our combined company much more
valuable to our customers." "The synergies in the companies'
product lines and the opportunities for new, highly integrated
security products are tremendous," stated Larry Midland, president
of Hirsch Electronics. "There is virtually no overlap in the
companies' current lines, yet the products and technologies are
extraordinarily complementary. And, in both our organizations' DNA,
we have a commitment to the customer and a clear focus on
innovation, reliability, and company integrity. I believe this is
an ideal match." Following the merger, Mr. Midland is expected to
join the board of directors of SCM Microsystems and will become an
executive officer of the combined company. The merger agreement has
been approved by the boards of directors of both companies and is
subject to the approval of both SCM's and Hirsch's stockholders.
The transaction is subject to other customary closing conditions,
including the filing by SCM of a registration statement on Form S-4
with the Securities and Exchange Commission ("SEC") with respect to
the registration of shares of SCM common stock and warrants to be
issued in the merger, and the declaration of its effectiveness by
the SEC. The transaction is expected to close in the first half of
2009. Following the merger, the combined company will be called SCM
Microsystems and its common stock will continue to trade under SCM
Microsystems' name on both the U.S. NASDAQ and the Frankfurt Prime
Standard exchanges. SCM and Hirsch products will continue to be
marketed under their respective brand names. Avondale Partners LLC
acted as financial advisor to SCM Microsystems and its Board of
Directors, and Gibson Dunn & Crutcher LLP is acting as legal
counsel to SCM Microsystems in connection with the transaction.
Imperial Capital LLP acted as financial advisor to Hirsch
Electronics, and Palmieri, Tyler, Wiener, Wilhelm & Waldron LLP
is acting as legal counsel to Hirsch in connection with the
transaction. Additional Information about this Transaction The
Registration Statement on Form S-4 that SCM intends to file with
the SEC will include a joint proxy statement of SCM and Hirsch that
also constitutes a prospectus of SCM. SCM and Hirsch will mail the
definitive joint proxy statement/information statement and
prospectus to their stockholders. SECURITY HOLDERS OF SCM AND
HIRSCH ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY
STATEMENT/INFORMATION STATEMENT AND PROSPECTUS, AND OTHER DOCUMENTS
FILED WITH THE SEC REGARDING THE PROPOSED MERGER CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. In addition
to the documents described above, SCM files annual, quarterly and
current reports, proxy, statements and other information with the
SEC. Security holders will be able to obtain free copies of the
Registration Statement and the joint proxy statement/information
statement and prospectus (when available) and other documents filed
by SCM with the SEC at the SEC's website at http://www.sec.gov/ or
at SCM's website at http://www.scmmicro.com/. THIS COMMUNICATION IS
FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY SECURITIES, NOR SHALL
THERE BE ANY SALE OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.
Participants in the Solicitation SCM and its directors and
executive officers and other persons may be deemed to be
participants in the solicitation of proxies from SCM stockholders
in respect of the proposed transaction. A description of direct and
indirect interests, by security holdings or otherwise, of the
directors and executive officers of SCM is set forth in SCM's proxy
statement for its 2008 annual meeting, which was filed with the SEC
on April 29, 2008. Additional information regarding the persons who
may, under the rules of the SEC, be considered participants in the
solicitation of proxies in connection with the proposed merger and
a description of their interests will be contained in the
definitive joint proxy statement/information statement and
prospectus and other relevant materials to be filed with the SEC.
Copies of these documents maybe obtained free of charge from the
SEC's website at http://www.sec.gov/ or from SCM's website at
http://www.scmmicro.com/. About SCM Microsystems SCM Microsystems
is a leading provider of solutions that open the Digital World by
enabling people to conveniently access digital content and
services. The company develops, markets and sells the industry's
broadest range of smart card reader technology for secure PC,
network and physical access and digital media readers for transfer
of digital content to OEM customers in the government, financial,
enterprise, consumer electronics and photographic equipment markets
worldwide. Global headquarters are in Ismaning, Germany. For
additional information, visit the SCM Microsystems web site at
http://www.scmmicro.com/. About Hirsch Electronics Hirsch
Electronics designs and manufactures security systems for worldwide
markets. Hirsch is a recognized leader in IP-based physical
security solutions that interoperate with other networked
databases, devices and systems, such as human resources,
provisioning, and directory services. Hirsch's award-winning
role-based access control, identity management, and policy-based
security management systems integrate access control, digital
video, alarm monitoring, smart cards and biometrics. Website:
http://www.hirschelectronics.com/. Forward Looking Statements This
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
These include, without limitation, our statements contained above
regarding the merger agreement, potential benefits and synergies of
the merger for both companies, expected expansion of sales into new
geographic markets and diversification and growth of customer base,
the successful development and introduction of new and converged
products, particularly contactless reader products, the anticipated
closing date of the merger and any statements about the benefits of
the business combination transaction, the new company's plans,
objectives, expectations and intentions and other statements that
are not historical facts. These statements involve risks and
uncertainties that could cause actual results and events to differ
materially, including the future business and financial performance
of SCM and Hirsch; the failure of stockholders to approve the
transaction; the risk that the businesses will not be integrated
successfully; the risk that any other synergies from the
transaction may not be fully realized or may take longer to realize
than expected; disruption from the transaction may make it more
difficult to maintain relationships with customers, employees or
suppliers; competition and its effect on pricing, spending,
third-party relationships and revenues; and the possibility that
the closing of the merger may be delayed, or that the merger may
not close. For a discussion of further risks and uncertainties
related to SCM's business, please refer to our public company
reports and the Risk Factors enumerated therein, including our
Annual Report on Form 10-K for the year ended December 31, 2007 and
subsequent reports, filed with the SEC. SCM undertakes no duty to
update any forward-looking statement to reflect any change in SCM's
expectations or any change in events, conditions or circumstances
on which any such statements are based. Note: The SCM logo is a
trademark of SCM Microsystems, Inc and the Hirsch logo is a
trademark Hirsch Electronics Corp. or its affiliates in the United
States and certain other countries. Additional company and product
names may be trademarks or registered trademarks of the individual
companies and are respectfully acknowledged. DATASOURCE: SCM
Microsystems, Inc.; Hirsch Electronics Corp. CONTACT: Stephan
Rohaly, +49 (89) 9595-5110, , or Darby Dye, +1-510-249-4883, , both
of SCM Microsystems; or Scott Howell of Hirsch Electronics,
+1-949-250-8888, ext. 130, Web site: http://www.scmmicro.com/
http://www.hirschelectronics.com/
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