SAFLINK Acquires BioMetric Solutions Group

SAFLINK announced it has entered into an agreement with Information Systems Support (ISS) and BioMetric Solutions Group (BSG) pursuant to which SAFLINK will acquire intellectual property and certain other assets related to digital identity and biometric physical access security technology. SAFLINK has also agreed to hire key personnel from ISS and BSG to support the acquired technology and products. Under terms of the agreement, SAFLINK will pay approximately $4.1 million for the acquisition, which includes $500,000 in cash and 1,122,855 shares of SAFLINK's common stock. ISS and BSG have agreed not to sell the shares of common stock received in the transaction for a period of three years. The acquisition has been approved by the boards of directors of SAFLINK, ISS and BSG, and by the stockholders of ISS and BSG. The acquisition is subject to limited closing conditions including the delivery by ISS and BSG of certain documents. The company believes that the transaction will have an accretive impact on SAFLINK's operating cash results beginning with the first quarter of 2004. "We believe the physical access technology will be another high margin business for us and will increase the opportunity in our existing markets, as well as open up numerous new markets," said Glenn Argenbright, SAFLINK's chief executive officer. "We also believe it will be a key component in over half of our revenues in the coming year. The purchase of the BSG technology and the hiring of its personnel is a major event in the evolution of our company." As a result of this transaction, the company will add a suite of physical access biometric products and technologies to its existing logical access products and solutions for network access. SAFLINK has been using BSG technology and expertise extensively in its development of a biometrically-enabled authentication system for a major pharmaceutical company. "SAFLINK has been a key partner of ours for some time," said Bob Turbeville, a former senior vice president for ISS who will head up the new physical access group for SAFLINK. "We are excited to be joining the SAFLINK team and we believe our combined solution forms one of the most powerful identity-based security solutions on the market today. We believe the biometrics industry has been moving toward a convergence of physical and logical access solutions, and we are excited to move that convergence forward by joining SAFLINK."