Digimarc approves L-1 Identity Solutions tender offer

By Lisa Kerner

Charlotte, N.C., July 7 - Digimarc Corp.'s board of directors unanimously approved L-1 Identity Solutions, Inc.'s tender offer for the company and recommended that the shareholders of Digimarc tender their shares.

According to a Digimarc news release, some executive officers and directors of Digimarc, including chief executive officer Bruce Davis, have agreed to tender their shares in the offer.

In March, L-1 agreed to acquire Digimarc in a stock and cash transaction valued at approximately $250 million.

Digimarc stockholders will receive approximately 50% of the purchase consideration in shares of L-1 stock and 50% in cash for a total cash consideration of about $120 million, it was previously reported.

Under the merger agreement, the number of L-1 shares to be issued will be based on the average price of the stock over the 20 consecutive trading days ending five days prior to closing of the transaction, a prior news release stated.

The number will be fixed at about 10.3 million shares if the average trading price of L-1's stock is between $11 and $14. If the price of L-1 shares exceeds $14 per share, the number of shares to be issued will be reduced. The maximum number of L-1 shares that can be issued is 11.3 million under the companies' definitive agreement.

Digimarc stockholders will also receive shares in a new company that will operate under the Digimarc name and will include Digimarc's digital watermarking business. The $310 million of cash to be received from L-1 plus $50 million from Digimarc will be used to capitalize this company.

L-1's identity solutions are designed to protect personal privacy. The company is based in Stamford, Conn.

Digimarc is a secure identity solutions provider based in Beaverton, Ore.

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