Biometric authentication and security solutions provider BIO-key International, Inc. announced in July its purchase of PistolStar Inc., a provider of large-scale on-premise and Identity-as-a-Service (IDaaS) identity and access management (IAM) solutions, for $2.5 million.

The acquisition was partially funded by $1.575 million in proceeds from the sale of a $1.811 million Senior Secured Convertible Note to Lind Global Macro Fund, LP. The note is convertible into shares of BIO-key common stock at a price of $1.16 per share and is secured by a first priority lien on all of BIO-key’s assets and properties.

“The PistolStar acquisition is an exciting strategic initiative that expands BIO-key’s multi factor authentication capabilities beyond our core strength in biometrics so that we can offer a complete suite of Identity Access Management and Identity-as-a-Service solutions to a broader universe of enterprise customers,” said Bio-key CEO Michael DePasquale.

Searching for Multi Factor Authentication Options

PistolStar’s flagship product is PortalGuard®, an enterprise multi factor authentication and single sign-on platform.

In searching for the right company, Bio-key was searching for a company that has a strong cloud strategy and Identity-as-a-Service. According to DePasqule, BIO-key acquired PistolStar to provide biometrics for traditional authentication options and give customers strong multi-factor authentication. Prior to the acquisition, Bio-key had already worked with PistolStar for around a year.

“The PortalGuard solution is an excellent solution for small and medium-sized enterprises,” said DePasqule. “It’s something that’s very easy to install. It’s full and complete, it’s a start to finish. And with our biometrics, it’s a very strong multi-factor option. And so we see that for the SMB market being a very strong application. On the other hand, Bio-Key has some very large customers that utilize our technology for identity and access management, to the tune of hundreds and hundreds of thousands of users. And so we are going to be able to cross-sell the PortalGuard solution into those larger accounts, where we’re not offering that full and complete single sign-on and the provisioning.”

The product delivers a flexible but uniform cloud or workstation multi factor authentication logon experience to secure enterprise user authentication and cloud application access. PortalGuard supports nearly every cloud authentication federation standard, all major directories, and a wide variety of authenticators, including BIO-key’s biometric solutions.

“The combination of PistolStar and BIO-key creates a more comprehensive suite of multi factor solutions with a much larger addressable market and far greater opportunities for both companies,” said PistolStar Founder and President Tom Hoey. “Importantly, PortalGuard’s customized multi factor configuration capabilities, combined with the deep biometric expertise of BIO-key, will provide a very compelling solution to address diverse user populations and budgets.”

Acquiring PistolStar Amid COVID-19

Specifically, the purchase can also serve to solve enterprise security vulnerabilities created by the rapid increase in remote work created by the COVID-19 pandemic.

“When people are working from home, on their computer, they could have a surrogate do their work,” noted DePasquale. “If they have to log a certain amount of time or they have to be online on a certain application, they can have or surrogate or almost delegate that responsibility. And with our solution, you can’t. Because you have to put your finger on that finger scanner. It’s not a code from your phone, it’s not a pin or a password that you can give to somebody. You literally have to be there and you have to put your finger on the scanner in order to authenticate into that portal. So that has become a very important item for financial institutions, insurance companies, as well as government agencies.”