With Bluehill ID and Hirsch, SCM builds identity management powerhouse

Anaheim, Calif., Sept. 22, 2009 -- Secure identity solutions provider SCM Microsystems and RFID technology developer Bluehill ID announced Monday that they have agreed to merge their respective companies.

Bluehill ID, a European-based company, began operations a little over two years ago in Germany focusing on identification and security solutions, making a number of acquisitions in the RFID and identification markets.

Under the agreement, Bluehill will be brought under the umbrella of SCM, but the company’s five divisions, Multicard, TagStar, Arygon Technology, Syscan ID, and ASiG Technology will retain their identities. SCM merged with U.S.-based access control company Hirsch Electronics earlier this year in a deal that doubled the size of SCM.

Multicard, which operates in Europe, specializes in multi-function smart cards for government and corporate secure identification programs. Arygon, which has operations in Germany, India and Singapore, provides RFID readers for such applications as transit and event ticketing. TagStar operates out of Germany and makes RFID tags for similar applications and recently launched a tag for metal products. Syscan ID, which is based in Canada and has operation in Brazil and the U.S., makes RFID solutions for agricultural asset management. ASig serves as a European distributor for the company.

Manfred Muller, SCM Microsystems executive vice president of strategic sales and business development, said that the companies first started working together when SCM was working in the e-document space and found that while they had great inroads into the market, they didn’t necessarily have the best technology. On the opposite side of the equation was Bluehill’s Arygon, which was a fairly young company, but had what many considered was the premier technology in the e-document space. At the same time, Arygon was getting into physical and logical access and needed contactless readers which SCM had.

“What was really created was a cross-selling type relationship,” said Muller.

For Bluehill, areas like physical access and logical access are only one part of the firms overall solution set, according to the company’s CEO Ayman Ashour, but being able to tie in with companies like SCM and Hirsch made sense with what they brought to the table.

“ID and RFID has been a bit of a strange market. RFID started out with companies from the paper industry who though that RFID was going to be closely tied to labels and alike products so you had a lot of companies coming in from the paper industry. Then for a while it was the anti-theft area with companies like Checkpoint and Tyco. Following that it was security companies and all these companies had legitimate interests in our RFID,” Ashour said. “The reality is that we think there are 50-to-100 different applications for these technologies. Our approach has been to look at the ID market globally without saying we’re only doing this or that specific vertical.”

Ashour added that over the last five or six years access control has become more about identity solutions.

“The industry is very splintered,” said Hirsch President Larry Midland. “In the U.S. alone we must have 5oo companies playing in (the access control) space.

According to Midland, the reason the merger between the companies makes so much sense is that the U.S. market has been primarily focused on proximity cards and access cards, while work is quickly and steadily moving to smart cards. The U.S. is finally starting to pick up is due in large part to efforts made by government initiatives like FIPS 201 and HSPD-12. Ashour added that government initiatives like HSPD-12 have put the U.S. at the forefront of RFID and smart card technologies.