Bioscrypt and A4Vision Merge Biometric Businesses

Bioscrypt, a Toronto-based company that has long been in the market of providing algorithms for fingerprint recognition, announced today that it has formed an agreement to acquire A4Vision.

The acquisition, which is expected to be completed in March, will bring Bioscrypt further into the biometric access control marketplace thanks to A4's 3D facial technology. A4Vision's facial recognition processes use three-dimensional imaging recognition, and have been adopted by such high-profile clients as Swiss banking company Pictet & Cie Banquiers, which chose the company's facial recognition to secure the bank's headquarters.

As recently as 2005, the company's products earned critical showcase at the New Product Showcase awards which are presented during the ISC West tradeshow in Las Vegas. That year, A4Vision's Access 3D Face Reader earned "Best of Show" and "Best Biometric Product".

Bioscrypt says it plans to include A4Vision's facial recognition products in Bioscrypt's own portfolio for access control. Bioscrypt added that it would be integrating those facial recognition systems with its acclaimed VeriSoft identity and access system.

Bioscrypt President and CEO Robert Williams said that the acquisition made sense because of the complementary nature of the technologies and both company's vision for enterprise access control.

"Bioscrypt and A4 share a strategic view of the opportunity in enterprise access control, further penetration of our existing positions in government and financial services markets, and our respective commitments to customer satisfaction," Williams said Tuesday in a statement announcing the acquisition.

Bioscrypt Chairman Pierre Donaldson said the move had the power to make the combined Bioscrypt/A4Vision "the de facto standard for biometric access Control."

Three-dimensional facial recognition has been fairly new to the biometric marketplace, which chiefly relied on two-dimensional recognition that could encounter problems with the way a face was presented to a camera or the site's lighting. The system A4Vision has created is chiefly designed for enrolled access control, such as for facility or network access.

The purchase is being made in an all-stock deal, with A4 stockholders earning a total of some 9 million common shares and warrants in Bioscrypt, and stock warrants that would allow the purchase of up to 4.6 million more common shares of Bioscrypt. The acquisition is also linked with a major investment in the newly merged company, with investors adding somewhere between $6 million and $8 million in U.S. funds.

As part of the merger, A4 CEO Grant Evans and Menlo Ventures general partner Douglas Carlisle will join Bioscrypt's board of directors.

The news follows a great deal of acquisitions and mergers being undertaken in the biometrics industry, chiefly driven by L-1 Investment Partners' Robert Lapenta, who has been quickly acquiring a number of biometric solution providers, especially in the AFIS (automated fingerprint identification systems) space.