As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/24/08  Digimarc Corp                     8-K:1,7,9   3/23/08    3:836K                                   Merrill Corp-MD/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                      HTML     37K 
 2: EX-2.1      Plan of Acquisition, Reorganization, Arrangement,   HTML    614K 
                          Liquidation or Succession                              
 3: EX-99.1     Miscellaneous Exhibit                               HTML     23K 

 

Exhibit 99.1

 

CONTACT:

 

Delisa Davis

RH Strategic for Digimarc Corporation

202-585-0210

ddavis@rhstrategic.com

 

Digimarc’s ID Systems Business to be Acquired by L-1 Identity Solutions

 

Digimarc to Focus on Growing Demand for Digital Watermarking Solutions

 

BEAVERTON, OR.  — March 24, 2008 — Digimarc (Nasdaq: DMRC) today announced it has entered into a definitive agreement to sell its ID Systems business to L-1 Identity Solutions, Inc. (NYSE: ID) in a stock and cash transaction valued at approximately $250 million based on the current market price of L-1 company stock.  The acquisition has been approved by the respective Boards of Directors of each company.

 

Under the terms of the definitive agreement, Digimarc stockholders will receive 50 percent of the purchase consideration in shares of L-1 stock and 50 percent in cash, subject to variations in the price of L-1 stock.  The cash consideration is approximately $120 million. The number of L-1 shares to be issued will be based on the average price of L-1 stock over the 20 consecutive trading days ending five days prior to closing of the transaction, which based on the current market price of L-1 stock is approximately 10.3 million shares.  If the price of L-1 stock exceeds $14 per share, the number shares will be reduced. Under the definitive agreement, the maximum number of L-1 shares that can be issued is 11.3 million. As part of the transaction, L-1 has agreed to purchase $5 million of the common stock of the new digital watermarking company at fair market value immediately following the spin-off. For a more detailed description of the terms and conditions of the transaction, please review the public filing of the agreement.

 

Pursuant to the definitive agreement, Digimarc’s Digital Watermarking business, together with all of Digimarc’s cash, will, immediately prior to closing of the acquisition, be contributed to a wholly-owned subsidiary of Digimarc which will be distributed to Digimarc’s shareholders in a taxable spin-off transaction.  Digimarc and L-1 will finalize the details of allocations between the Digital Watermarking business and the ID Systems business to be acquired by L-1, as well as the terms of transition services and license agreements between the two entities, with the next 45 days.

 

According to Bruce Davis, Digimarc Chairman and CEO, “The leadership of our companies shares a common vision for the future of identity management and the tremendous significance it has on the security and prosperity of people around the world.  High quality and timely provision of ID solutions is particularly important in the United States where federal and state governments are investing in much more comprehensive and secure systems than at any time in our past.  The addition of Digimarc’s ID business to L-1’s secure identity management portfolio will help our customers and theirs to rapidly move toward compliance with new federal regulations such as the REAL ID Act.  The extensive offering made possible by this combination will more effectively address many important goals, including strengthening national security, enhancing transportation safety, and protecting legitimate commercial interests.  In the international arena, this combination will enable L-1 to play a more significant role in the substantial global market for secure identification solutions.”

 

“The synergies between our secure credentialing businesses make this a natural combination and one that will deliver great benefit to our customers and the industry,” said Robert V. LaPenta, Chairman and CEO of L-1 Identity Solutions. “Digimarc’s expertise in centralized production, together with L-1’s biometric

 

 

 

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Securities Safe Harbor

 

With the exception of historical information contained in this release, the matters described herein contain certain “forward-looking statements” that are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, particularly those statements regarding the effects of the proposed spin-off and the proposed merger and those preceded by the words “believes,” “expects,” “estimates,” “anticipates,” “will” or words of similar import are statements of management’s opinion. These statements are subject to certain assumptions, risks, uncertainties and changes in circumstances. Actual results may vary materially from those expressed or implied from the statements herein or from historical results, due to changes in economic, business, competitive, technological and/or regulatory factors.  For instance, although Digimarc and L-1 have signed an agreement for Digimarc to spin off its digital watermarking business and a subsidiary of L-1 to merge with and into Digimarc, there is no assurance that they will complete the proposed spin-off and merger.  The proposed merger may not occur if the companies do not receive necessary approval of Digimarc’s shareholders, or if it is blocked by a government agency, or if either Digimarc or L-1 fail to satisfy other conditions to closing.  More detailed information about risk factors that may affect actual results is set forth in filings by Digimarc with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K, including but not limited to those described in the Company’s Form 10-K for the year ended December 31, 2007 in Part II, Item 7 thereof (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”) under the captions “Liquidity and Capital Resources” and “Factors Affecting Forward Looking Statements” and in Part II, Item 9A thereof (“Controls and Procedures”). Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date of this release.  Except as required by law, we undertake no obligation to publicly update or review any forward-looking statements to reflect events or circumstances that may arise after the date of this release

 

Additional Information

 

In connection with the proposed merger, L-1 Identity Solutions will file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of Digimarc that also constitutes a prospectus of L-1 Identity Solutions.  Digimarc will mail the proxy statement/prospectus to its stockholders. L-1 Identity Solutions and Digimarc urge investors and security holders to read the proxy statement/prospectus regarding the proposed merger when it becomes available because it will contain important information. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov). You may also obtain these documents, free of charge, from L-1 Identity Solutions’ website (www.L1id.com) under the tab “Investor Relations” and then under the heading “Financial Information” then under the item “SEC Filings”. You may also obtain these documents, free of charge, from Digimarc’s website (www.digimarc.com) under the heading “Investors” and then under the tab “SEC Filings.”