FILED BY SSP SOLUTIONS, INC. PURSUANT TO RULE 425
UNDER THE SECURITIES ACT OF 1933 AND DEEMED FILED
PURSUANT TO RULE 14A-12 OF THE SECURITIES EXCHANGE
ACT OF 1934
SUBJECT CORPORATION: SSP SOLUTIONS, INC.
COMMISSION FILE NO.: 000-26227
PRESS RELEASE Source: SAFLINK Corporation
SAFLINK AND SSP-LITRONIC ANNOUNCE MERGER AGREEMENT
Monday March 22, 4:54 pm ET
BELLEVUE, Wash. & Irvine, Calif.--(BUSINESS WIRE)--March 22, 2004-- Merger
Expected to Create a Security Industry Leader in Identity Assurance Management;
Facilitates Commercial and Public Sector Adoption of PKI-infrastructure and
Biometric Security
SAFLINK Corporation (Nasdaq:SFLK - NEWS), a leading provider of biometric
security solutions, and SSP Solutions, Inc. (Nasdaq:SSPX - NEWS), dba
SSP-Litronic, a leading provider of secure identity management and information
assurance products, today announced the signing of a definitive merger
agreement.
Pending stockholder and regulatory approval, SAFLINK will acquire all
outstanding shares of SSP-Litronic in a stock-for-stock transaction. Under terms
of the merger agreement, the security holders of SSP-Litronic would receive
approximately 49% of the combined company's outstanding fully-converted shares
at closing and the security holders of SAFLINK would continue to hold the
remaining 51% of the combined company's outstanding fully-converted shares at
closing. As approved by the boards of directors of each company, the merger
calls for each share of SSP-Litronic common stock to be exchanged for 0.60
shares of SAFLINK common stock.
The merger is expected to be accretive to 2004 earnings and to provide
significant upside potential in existing and new sectors. The merger is intended
to qualify as a tax-free transaction and is expected to close in the second or
third quarter of 2004, depending on regulatory review.
By combining SAFLINK and SSP-Litronic into one entity, the merger uniquely
positions the new company to solve the personal privacy issues that have slowed
the adoption of important government security initiatives. SAFLINK and
SSP-Litronic believe that a combined product offering can answer new legislative
requirements in healthcare and financial services, and can help meet the growing
demand for the new "smart" passport and driver's license. In addition, the new
company's combined technologies can provide a foundation for security
initiatives being implemented by large global enterprises and the United States
Government's Department of Homeland Security.
The powerful combination of SSP-Litronic's identity management products with
SAFLINK's biometric software creates a 100% American-owned, military-grade
authentication solution. The combination of biometrics and smart cards brings
advanced security to the enterprise, helping to secure sensitive access points
from doorways to desktops. The combined company will be able to provide
commercial enterprises with a scalable, reliable, and secure framework for
identity and assurance management that covers network and application security,
physical security, time and attendance, and regulatory compliance for automated
manufacturing systems.
"Similar to what we've seen with the convergence of logical and physical
biometric technologies, many security analysts and experts have anticipated that
a combination of biometrics, smart cards and PKI would ultimately be required to
address enterprise security needs," said Glenn Argenbright, CEO of SAFLINK. "The
development of high-profile government security projects such as the Department
of Defense's Common Access Card (CAC) program reinforces this concept. As a
security leader, SAFLINK has long recognized the need for this type of
convergence and has been closely monitoring the progress of this technological
evolution. In pursuing this strategy, we carefully analyzed each of the major
technologies in this field. It is my belief that SSP-Litronic provides the most
secure and scalable smart card and PKI technology available today for
integration with our software products. SSP-Litronic has outstanding technology
that has been validated by some of the most security-centric organizations in
the world. I believe that together we will deliver on the promise of biometrics,
smart cards, and PKI integration."
For over three decades, SSP-Litronic has helped set the standard for high
assurance in communications, data protection, and network security. For more
than a decade, SAFLINK has defined enterprise security using biometric solutions
for logical, physical, manufacturing automation, application access control, and
time and attendance.
The addition of SSP-Litronic to the SAFLINK solution team builds on SAFLINK's
acquisition of physical security technology from Biometrics Solutions Group
(BSG) in December 2003, allowing the unique combination of biometrics, smart
cards, and digital certificate management solutions to be applied to the
identity assurance needs of the entire enterprise.
By joining forces, the combined company will enjoy compelling advantages that
are expected to benefit the customers of each, including:
o Over 12 years experience delivering biometric technology based
products and services.
o Over 33 years experience delivering high assurance cryptographic
security products and services.
o A scalable, reliable, and secure framework for enterprise-wide
identity assurance management.
o An application portfolio delivering enhanced business security for a
wide variety of secure messaging, remote access, electronic commerce,
strong authentication, secure storage, and media encryption.
o A broad shrink-wrapped product offering targeted to meet the needs of
the most discerning commercial enterprise information technology
managers.
o Proven military-grade solutions targeted to meet the needs of the most
demanding federal government security officer.
o A broad and strong network of strategic partners, including Microsoft,
Dell, Novell, Computer Associates, Bearing Point, Citrix, Verisign,
Unisys, EDS, Atmel, Schlumberger, Lockheed Martin, Iconics, Computer
Sciences Corporation, Documentum, and Panasonic.
o A proven track record with a wide range of government organizations
including the National Security Agency, the FBI, the CIA, the
Department of Defense and Armed Forces, the U.S. Army Corps of
Engineers, the U.S. Department of State, the U.S. Department of
Treasury, the U.S. House of Representatives, the U.S. Department of
Transportation, the Environmental Protection Agency and the
Transportation Security Administration.
"I believe our combined technologies will provide the government with higher
levels of national security, while building-in the appropriate safeguards for
individual privacy," said Marvin Winkler, Co-Chairman and CEO of SSP-Litronic.
"This merger opens the door for accelerated deployment and acceptance of both
public sector and enterprise security initiatives, and allows them to
standardize on a single, secure identity management solution. I believe an
integrated smart chip, biometrics and PKI technology are the keys to deployment.
With similar philosophies and complementary technologies, we believe the
combined company will be positioned for growth and operational leverage going
forward."
Added Argenbright, "Independently, both companies are extremely well-positioned
on the largest smart card plus biometric projects in the industry -- most
notably in the government sector. I believe this merger dramatically strengthens
our collective position on these initiatives."
Upon completion of the merger, SSP-Litronic will operate as a wholly-owned
subsidiary of SAFLINK. The new company will be led by a management team and
board of directors selected from both companies. Richard P. Kiphart, formerly
chairman of Memphis-based Concord EFS and a managing director of William Blair &
Company, LLC investment banking firm will become Chairman of the board of
directors of the combined company. Glenn L. Argenbright, President and CEO of
SAFLINK, will remain President and CEO of the combined company. Kris Shah,
Co-Chairman and President of SSP-Litronic, will maintain his role as President
of SSP-Litronic. Marvin Winkler, Co-Chairman and CEO of SSP-Litronic, will
become the Vice Chairman of the board of directors and is expected to assist
executive management with strategic initiatives. Other executive management
positions and members of the board of directors will be designated prior to the
closing of the transaction. The transaction is subject to the approval of each
company's stockholders, regulatory review, as well as other customary closing
conditions.
SAFLINK and SSP-Litronic anticipate filing a Joint Proxy Statement/Prospectus
with the Securities and Exchange Commission in connection with the merger. In
addition, SAFLINK and SSP-Litronic will file other information and documents
concerning the merger and their respective businesses with the SEC. WE URGE
INVESTORS TO REVIEW THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER INFORMATION
TO BE FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE MERGER. Any offer of securities will only be made pursuant to the Joint
Proxy Statement/Prospectus. These documents will be available without charge on
the SEC's web site at WWW.SEC.GOV and may be obtained without charge from the
SEC at telephone number 800-SEC-0330. A free copy of the Joint Proxy
Statement/Prospectus may also be obtained from SAFLINK and SSP-Litronic.
INVESTORS SHOULD READ THE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE
MAKING ANY VOTING OR INVESTMENT DECISIONS. The officers and directors of SAFLINK
and SSP-Litronic may have interests in the merger, some of which may differ
from, or may be in addition to, those of the stockholders of SAFLINK and
SSP-Litronic generally. A description of the interests that the officers and
directors of the companies have in the merger will be available in the Joint
Proxy Statement/Prospectus.
C.E. Unterberg, Towbin acted as SAFLINK's financial advisor on the transaction,
and rendered a fairness opinion to SAFLINK's board of directors. Burnham Hill
Partners acted as SSP-Litronic's financial advisor, and Wedbush Morgan provided
the fairness opinion to SSP-Litronic's board of directors.
Conference Call
The Company will hold a conference call today at 5:00 PM EST to discuss its
agreement to merge with SSP-Litronic, as well as its Fourth Quarter and Year-End
financial results. The Company may provide forward-looking information on this
call. To listen to the conference, please call 1-800-992-7413 (international
callers dial +1-801-303-7424). An archive of the call will be available for 10
business days at the following link:
http://www.visualwebcaster.com/event.asp?id=21397.
About SAFLINK
SAFLINK Corporation offers software solutions that protect intellectual
property, secure information assets, and eliminate passwords. SAFLINK's software
provides Identity Assurance Management(TM), allowing administrators to verify
the identity of users and control their access to: computer networks; physical
facilities; applications; manufacturing process control systems; and time and
attendance systems. For more information, please see WWW.SAFLINK.COM or call
800-762-9595.
About SSP-Litronic
SSP-Litronic designs and develops innovative data and communication security
solutions for both corporate and government institutions. The Company provides
network security, desktop protection, and high assurance messaging systems for
many organizations of the U.S. Government. For more information, visit our
website at HTTP://WWW.SSPLITRONIC.COM/ or call SSP-Litronic at (949) 851-1085.
SSP-Litronic is a dba of SSP Solutions, Inc.
About C.E. Unterberg, Towbin
Founded more than 70 years ago, C.E. Unterberg, Towbin supplies capital and
financial advice to companies with market capitalization of up to $1 billion in
the technology, healthcare and global security industries. Its services include
public offerings, direct investments, mergers and acquisitions and private
placements. Unterberg, Towbin also provides equity research, sales and trading,
asset management and private client services. Principal offices are located in
New York, San Francisco and Silicon Valley. In 2002, John Gutfreund, former
Chairman and CEO of Salomon Brothers, joined Unterberg, Towbin. He is past Vice
Chairman of the New York Stock Exchange and past member of the Board of
Directors of the Securities Industry Association. Additional information on CEUT
can be found on its website, WWW.UNTERBERG.COM. For further information, to
speak with Thomas Unterberg, John Gutfreund, Andrew L. Berger, or Jack Burns at
C.E. Unterberg, Towbin, please contact Davia Temin of Temin and Company at
212-588-8788 or INFO@TEMINANDCO.COM.
About Burnham Hill Partners
Burnham Hill Partners, based in New York City, was formed in August 2003 and is
a division of Pali Capital Inc., a NASD registered broker dealer. The
professionals at Burnham Hill Partners have extensive experience providing
comprehensive financing and financial advisory services to publicly traded
companies with market capitalizations of up to $250 million. Burnham Hill
Partners' sector expertise includes telecommunications, electronics equipment
and services, network security and software as well as medical devices and life
sciences. For more information on Burnham Hill Partners, its professionals and
deal history call 212-980-2200.
NOTE: "SAFLINK" and "The Power of Biometric Authentication" are registered
trademarks of SAFLINK Corporation. "Protecting your enterprise through secure
authentication" and "Identity Assurance Management" are trademarks of SAFLINK
Corporation. All other trademarks are the property of their respective owners.
Forward-Looking Statements
This press release contains forward-looking statements, including
forward-looking statements regarding the amount and timing of synergies that may
be achieved in connection with the merger, the strength of the combined
company's product offering following the merger, the degree to which the
combined company will alter the competitive landscape in its industry,
prevailing market conditions and the combined company's ability to successfully
fulfill its customers' needs. Actual results could differ materially from those
projected in or contemplated by the forward-looking statements. Factors that
could cause actual results to differ include the possibility that the merger may
not close, the failure of the combined company to retain key employees, the
failure of the combined company to manage the cost of integrating the businesses
and assets of SAFLINK and SSP-Litronic, general economic conditions, the pace of
spending and timing of economic recovery in the biometric and smart card
industry, the combined company's inability to sufficiently anticipate market
needs and develop products and product enhancements that achieve market
acceptance, and higher than anticipated expenses the combined company may incur
in future quarters. In addition, please refer to the risk factors contained in
SAFLINK's SEC filings, including, without limitation, SAFLINK's most recent
Quarterly Report on Form 10-Q filed with the SEC on November 14, 2003 and its
Annual Report on Form 10-K filed with the SEC on March 28, 2003, and in
SSP-Litronic's SEC filings, including, without limitation, SSP-Litronics's most
recent Quarterly Report on Form 10-QSB filed with the SEC on Registration
Statement on November 19, 2003 and its Annual Report on Form 10-K filed with the
SEC on April 15, 2003, as amended.
_____________________________
CONTACT:
SAFLINK Corporation
SAFLINK Investor Contact:
Jon Engman, Chief Financial Officer
800-762-9595
jengman@saflink.com
or
MKR Group, LLC
Todd Kehrli or Charles Messman
626-395-9500
ir@mkr-group.com
or
SSP-Litronic
SSP Solutions, Inc. Investor Contact:
Thomas E. Schiff, Chief Financial Officer
949-851-1085
tom.schiff@ssplitronic.com
or
www.saflink.com or
www.sspsolutions.com
____________________
Source: SAFLINK Corporation