MELBOURNE, AUSTRALIA: AuthenTec, a provider of security, identity management and touch control solutions, and privately-held UPEK, a leading supplier of fingerprint solutions for consumer, business and government applications, announced that the companies have combined, creating the world’s largest provider of fingerprint sensors and identity management software, as well as biometric and embedded security solutions. 

AuthenTec will remain headquartered in Melbourne, Florida and will be led by newly named CEO Larry Ciaccia, who previously served as AuthenTec’s president and chief operating officer, said a press release.

This merger establishes AuthenTec as the industry leader with significantly greater scale, an increased customer footprint and broader market diversity, thereby enhancing opportunities for future revenue growth and profitability, it added.

The combined company will benefit from AuthenTec’s leadership position in the PC and wireless markets as well as in embedded security, and from UPEK’s software expertise, presence in the PC and wireless markets and leadership in government biometrics.

The merger makes the entity the world’s largest provider of fingerprint sensors and identity management software.

“The combination of AuthenTec and UPEK creates the leading provider of security, identity management and touch control solutions with the scale and customer diversity to accelerate the achievement of our growth and profit objectives,” said Larry Ciaccia.  “Together, we are able to achieve enhanced profitability through synergistic cost reductions, gain depth and expertise as an expanded global team advancing our technology and product roadmaps, and add to an unmatched patent portfolio.

Scott Moody, who is the co-founder of AuthenTec and has been CEO since its inception, will continue as a member of the board. Joining him are two new directors from Upek: Ronald Black and Jean Schmitt.

Under the terms of the transaction, UPEK’s shares will be exchanged for approximately 5.9 million shares of AuthenTec’s common stock and a convertible promissory note in the aggregate principal amount of $21.6 million that will be satisfied by either the issuance of approximately 8.0 million additional shares of AuthenTec common stock or the repayment of the principal amount of the note by March 1, 2011, subject to a one-time extension of up to 60 days.