An investigation on behalf of investors of L-1 Identity Solutions, Inc. (NYSE:ID) over potential breaches of fiduciary duty by the ID board of directors in connection with the proposed takeover of L-1 Identity Solutions, Inc. by Safran was announced.

The investigation by a law firm concerns whether L-1 Identity Solutions, Inc. and its Board breached their fiduciary duties owed to ID investors in connection with the proposed takeover.

On Monday, Sep 20, 2010 L-1 Identity Solutions announced that it has entered into an agreement to be acquired by Safran in a merger transaction providing for stockholders to receive $12.00 per share in cash, for an aggregate enterprise value of approximately $1.6 billion, inclusive of outstanding debt. Under the terms of the agreement, Safran has agreed to acquire L-1 Identity Solutions, Inc. following the sale of L-1's intelligence services businesses to BAE Systems, Inc. BAE Systems, Inc. (the U.S. affiliate of BAE Systems plc) has agreed to acquire the stock and membership interests of the entities comprising the L-1 intelligence services businesses for a purchase price of approximately $295.8 million in cash and approximately $7.2 million of certain assumed obligations for a total value of $303.0 million. According to L-1 Identity Solutions, Inc. its board of directors has unanimously approved both the Safran agreement and BAE Systems sale transaction and the offer by Safran for L-1 Identity Solutions stockholders to receive $12.00 per share in cash represents a premium of 24 percent over L-1's closing stock price on the NYSE on September 17, 2010 and a premium of 66 percent over the closing stock price on January 5, 2010, the day prior to L-1's announcement of its strategic alternatives review process.

But the investigation by a law firm concerns whether the proposed price is unfair to the shareholders of L-1 Identity Solutions, Inc. (Public, NYSE:ID). Even though shares of L-1 Identity Solutions, Inc. (NYSE:ID) traded before the announcement at $9.78 per share and increased to $11.62 per share after the news. ID shares traded as high as $17 during 2008 and over $21 per share in 2007. In addition L-1 Identity Solutions revenue increased by more than 300% over the past four years. L-1 Identity Solutions, Inc. reported in 2006 $164.39million total revenue, in 2007 $389.51million, in 2008 $562.87million, and in 2009 $650.94million. Its Net Income went from a Net loss of $31.04million to a Net Loss of $4.20million. Therefore the investigation concerns also whether L-1 Identity Solutions Board of Directors breached their fiduciary duties to L-1 Identity Solutions, Inc. (NYSE:ID) stockholders by failing to adequately shop L-1 Identity Solutions, Inc. before entering into the transaction.