3M Co. is selling the identity management business that is behind most U.S. passport readers to a Dutch company for $850 million.
The deal announced Friday is subject to regulatory approval, but is expected to close during the first half of 2017, officials said.
The upcoming move is the latest divestiture of a business with long roots in 3M that is now considered outside its core business goals. Since last year, 3M has shed its library systems business, a French-based license-plate fabricator, a $20 million pressurized foam adhesives business and a static control business.
The identity security division being sold generates $215 million a year and boasts 450 employees who will become part of Amsterdam-based Gemalto after the sale. The business is part of 3M’s $5.5 billion Safety & Graphics Business and makes passport, visa and document readers, laminates for security ID badges, and identification biometric systems that recognize fingerprints, faces and irises, said company spokeswoman Lori Anderson.
Goldman, Sachs & Co. advised 3M and helped evaluate strategic alternatives for the unit.
John Riccardi, vice president of the company’s Traffic Safety and Security Division, said 3M’s decision to sell the business came after a thorough review.
“We believe that the identity management business will be better positioned with a company that is primarily focused on security solutions,” he said. “I want to thank our employees for their outstanding contributions to our business.”
3M’s identity management business has been a leader in providing biometric hardware and software to customers worldwide.
The business includes the 3M Cogent Inc. subsidiary that provides biometric products to law enforcement, border control and civil identification authorities.
Once the deal is complete, officials said 3M will record a gain related to the transaction, and expects to incur “various charges as it continues to make investments to drive growth and improve productivity.”
3M officials are trying to achieve greater growth in the firm’s Safety and Graphics Business; compounded annual sales fell 1 percent between 2013 and 2015 but are up 3.3 percent for the first nine months of 2016.
During an August interview, 3M CEO Inge Thulin noted that some businesses under 3M’s Safety and Graphics umbrella, such as the library systems business, “have underperformed, and we have worked very hard for the last four years to sort out the portfolio” and made decisions to sell sluggish noncore entities.
The goal of “business transformation” and identifying those businesses with the best growth opportunities continues, he said at the time.
3M’s stock closed Friday at $178.49, up $2.61 a share.