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Valid acquires Vmark’s Versatile Card Technology

Thursday 22 November 2012

Valid, a major smart card manufacturer headquartered in Rio de Janeiro, Brazil, is in the process of acquiring Vmark, a payment solutions company, with six units in the U.S. and a total of 1,200 employees, primarily concentrated in Chicago and New Jersey, USA. Valid shall pay approximately US$ 51.2 million (EUR 39.8 million) in aggregate consideration for such assets.

 

Vmark is essentially known as the holding company for Versatile Card Technology (VCT), a long standing US-based plastic card manufacturer. Vmark is also the holding company for Qualteq, Creative Automation (CAC), Unique Mailing Services (UMS), Global Card Services (GCS), Unique Embossing Services (UES), Automated Presort (API), Fulfillment Excellence (FXI), Unique Data Services (UDS) and Veluchamy. The group of companies covers activities such as the production of plastic cards, direct mail marketing, and data solutions. The Vmark companies operate across 7 facilities with 1,200 employees, principally around Chicago, Illinois and in South Plainfield, New Jersey. 

 

The Vmark group had voluntarily filed for protection under Chapter 11 on August 14, 2011. In September 2012, Valid USA was provided with status as a stalking horse bidder for participating in an auction for the acquisition of Vmark assets, to be held in case other potential buyers present proposals, expected to occur over the next 60 days. After the Vmark group received no other qualified bids for its assets, the auction for Vmark’s assets was cancelled and Valid’s proposal was deemed as the winning bid by the court-appointed Trustee, and approved by the United States Bankruptcy Court for the Northern District of Illinois. The sale agreement is subject to customary closing conditions, with Valid anticipating a closing on or before November 30, 2012. It is anticipated that, following the closing, the Vmark companies will operate as part of Valid USA.

 

This acquisition will expands Valid’s global reach, and allow the company to benefit from the upcoming EMV migration in the USA. Also, Valid will be ready to deliver identification cards and driver’s licenses and secure mobile telecommunications solutions to North American markets. Versatile Card Technology, Vmark’s lead company, positions itself as “the largest US manufacturer of plastic cards”. According to the latest Nilson Report market sizing (cf. Smart Insights Weekly #12-44), Versatile Card Technology shipped 394 million payment cards in 2011, out of which 36.5 million where smart cards.

 

A publicly-traded Brazilian company, Valid is present in all Brazilian states and is expanding operations around the world. Besides Brazil, Valid has operations in Argentina, Spain and the United State, giving the company a market capitalization of more than US$ 1 billion (EUR 781 million), and more than 5,000 employees. According to the latest Nilson Report market sizing (cf. SIW #12-44), Valid shipped 155 million payment cards in 2011, out of which 44.5 million where smart cards.