Identification verification technology provider Bioscrypt has formed an agreement with Dublin, Calif.-based Cognizance to acquire all of the company's stock.
Cognizance and Bioscrypt formed a partnership in the fall 2004 which allowed Bioscrypt to market and sell Cognizance's desktop authentication technology, and the new agreement moves the bond between the company's even closer, with Bioscrypt's acquisition of Cognizance's stock.
According to a statement from Bioscrypt, the company will pay $7 million to Cognizance upon closing of the agreement. If, in 2005, Cognizance reaches a set of financial goals, Bioscrypt will pay another $5 million. The Bioscrypt statement says the transaction will likely close next week.
The moves signals Bioscrypt's further foray into the world of computer access, by adding Cognizance applications that offer single sign-on, network logon, and self-registration for new users.
As part of the acquisition, Bioscrypt will be rolling out its VeriSoft software line, which offers the VeriSoft Credential Manager and the VeriSoft Access Manager and the company's advanced Veri-Admin software. According to Bioscrypt's director of investor relations, Matthew Bogart, Cognizance software already has some large-level clients and the company is expected to provide positive cash flow to Bioscrypt.
The company says the acquisition is part of its "Door to Desktop" strategy, whereby physical and network access are merged together. According to Bogart, the merging of physical and IT security coincides well with the company's acquisition of Cognizance.
Bogart says the company's door-to-desktop strategy looks especially promising for the financials services and healthcare markets where sweeping legislations like Sarbanes-Oxley and HIPAA have changed the way company's must secure access to data.
"It's typically something people are asking for more and more, and it's part of the convergence of physical and network security," says Bogart. "For example, organizations want to secure their assets and it doesn't matter whether that's physical or digital assets. Owners are asking how we can consolidate these functions."
The move also changes the perception of Bioscrypt from being almost solely in the physical access sector to being more of a full solutions provider for identity verification. According to Bogart, the company's one-to-one algorithm for fingerprint verification is proving equally suited for allowing users to access a network as it is for allowing an electrically controlled door to open.
The announcement of the acquisition also marks a personnel move within the company. Yuri Khidekel, who founded Identicator and was a former head of software development with Identix before founding Cognizance, has been chosen to serve as vice president of products for Bioscrypt.
In January, Bioscrypt announced that the company would be part of the Transportation Work Identification Credential program (TWIC), and according to Bogart, the airport market has been especially favorable to the company, with major sales to the Dubai airport, as well as an as-of-yet unnamed major U.S. airport. The company's technology is being used in these airports predominantly for verifying employee access to secure areas, and growth in this market may also be influenced by the recent government mandate of biometric-enabled access to secure airport areas.