Smartrac to acquire KSW and UPM RFID business
KSW and Smartrac have very similar positions in the global RFID value chain. The long-term expertise of KSW in the high frequency (HF) and ultra-high frequency (UHF) RFID inlay production and proprietary know-how of KSW are expected to contribute to strengthening Smartrac’s technology base. Synergies are also expected to result from joint research and development activities. Smartrac says this acquisition further extends its market leading position in the RFID industry in particular in the access control, e-payment, e-Ticketing, and asset management application fields as well as for high-security products for government identification documents.
KSW Microtec AG is headquartered in Dresden, Germany. The acquisition enlarges Smartrac’s presence in Germany to three locations, including the Group’s Corporate Service Center in Stuttgart and the manufacturing facility in Reichshof-Wehnrath. KSW and the totality of its 72 employees will continue their business activity in Dresden, Germany. Under the new ownership, KSW’s operations will be integrated into Smartrac’s business unit organization and global corporate structure. The location in Dresden shall be fostered and shall serve as a European competence center for the Business Unit eID and the competence center for the development of high-security products for government identification documents.
Smartrac also announced it has reached an agreement with UPM-Kymmene Corporation (UPM) by which Smartrac will take over UPM’s RFID business while UPM-Kymmene Corporation will become an indirect stockholder of Smartrac. The transaction is still subject to certain customary conditions, including regulatory approvals.
As consideration for UPM’s RFID business, UPM will obtain an indirect economic interest in Smartrac of 10.6% via OEP Technologie. OEP Technologie is an acquisition company controlled by One Equity Partners (OEP). OEP Technologie holds approximately 87% of the issued capital and voting rights in Smartrac.
UPM RFID is part of UPM-Kymmene Corporation’s Engineered Materials business group and consists of three companies located in Finland, the United States and China. UPM RFID is a major supplier of passive RFID products specializing in the development and high-volume production of HF, NFC, and UHF RFID tags and inlays for use in a broad range of RFID applications.
In related news, Smartrac management board resolved to increase the share capital of the company from EUR 8,167,498.50 (16,334,997 bearer shares) to EUR 8,872,044 (17,744,088 bearer shares) by the issuance of 1,409,091 bearer shares with a nominal value of EUR 0.50. Smartrac’s major shareholders OEP and Manfred Rietzler have agreed to subscribe for the new shares as a sign of their strong commitment to the company. Manfred Rietzler, co-founder of the company and Member of Smartrac’s Supervisory Board, will subscribe for 136,364 new shares and OEP Technologie B.V. will subscribe for 1,272,727 new shares at an issue price of EUR 11.00 payable in cash. Smartrac will take in gross proceeds in the amount of approximately EUR 15.5 million. The company intends to use the proceeds to finance the acquisition of Neology (cf. Smart Insights Weekly #11-50).