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O.C. BUSINESS PLUS

Swedish Firm to Buy Hughes ID Devices

Deals: Irvine company has much of world's market in card-reader access systems. It fetches $250 million.

November 07, 2000|ROBIN FIELDS | TIMES STAFF WRITER

The world's largest lock maker agreed Monday to acquire closely held Hughes Identification Devices for about $250 million in cash, adding the Irvine company's electronic systems to its more old-fashioned product line.

The deal pairing Sweden's Assa Abloy AB and Hughes Identification, which holds about 70% of the U.S. market and 40% of the international market for electromechanical locks, requires Swedish regulatory approval.

Hughes management will remain largely intact, except for President Don Nelson, who has planned to retire for more than a year, company executives said.

Hughes Identification, which began as a division of Hughes Electronics Corp., makes the cards and card readers many businesses and government agencies use to limit access to their offices. Its clients include Motorola, International Business Machines Corp., numerous colleges and the U.S. government.

It became an independent company in 1995, acquired by a group that included the division's management, IBM and Citicorp Venture Capital.

On its own, Hughes Identification enjoyed swift growth as the private sector became increasingly concerned about security.

"As crime increased, more businesses locked their doors and installed these systems," said Jim St. Pierre, vice president of product marketing.

Sharp Increase in Sales, Work Force

The company's sales jumped 40% to 50% annually, blossoming from about $10 million in 1995 to about $100 million a year. It grew from 30 employees to 350, 240 of them in the company's Irvine headquarters.

St. Pierre said all of the Irvine jobs will be retained, and that the local staff may be expanded. The company also has a research and development center in Denver and a production facility in North Haven, Conn.

Assa Abloy has been on an acquisition spree. It bought Williams Plc's lock unit, Yale Intruder Security, for $1.3 billion in March to gain access to the global residential lock market.

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