Symbol Technologies to Acquire Matrics

Mobile computing specialist adds radio frequency identification capabilities in move to penetrate supply chain RFID market

Mobile computing specialist adds radio frequency identification capabilities in move to penetrate supply chain RFID market

Holtsville, NY — July 28, 2004 — Mobile computing specialist Symbol Technologies is set to acquire Matrics, a provider of electronic product code (EPC)-compliant radio frequency identification (RFID) systems in a deal that one industry analyst says provides a clear picture of Symbol's intentions in the supply chain RFID market.

The purchase price for privately held Matrics, which is based in Rockville, Md., was $230 million in cash. The deal is expected to close this quarter, pending regulatory approval.

"The acquisition of Matrics is a significant step in executing our plan to be a leader in RFID, and expands our offerings in the advanced data capture industry," said William Nuti, Symbol president and CEO, in a company statement.

Symbol believes, according to Nuti, that in order for RFID to be deployed successfully, it needs to be deployed as a system that allows customers to capture, move and manage critical information to and from the point of business activity. By combining Matrics' EPC-compliant RFID products with Symbol's portfolio of mobile computing, advanced data capture and wireless technologies, Symbol believes it can help customers in key market segments gain operational efficiencies in their supply chains and realize competitive advantage.

Chantal Polsonetti, vice president with technology analyst firm ARC Advisory Group, said that the deal addressed the lingering question as to what Symbol's plans were in the realm of supply chain RFID.

"After pursuing a largely stealth approach to this emerging market, Symbol has acquired one of the leading suppliers in the passive RFID realm, at the same time adding both tag and fixed reader capabilities to complement its mobile computing offerings and build full-solution capabilities," Polsonetti said.

However, Polsonetti added: "One issue that remains to be resolved is Intermec's patent infringement suit against Matrics, which calls for the company to pay Intermec a reasonable royalty but not stop selling its products." Symbol did not address the Intermec suit in its announcement of the Matrics acquisition.

Matrics has focused its strategic RFID solutions efforts on EPC standards. Matrics provides EPC-compliant RFID systems for retail, defense, transportation and other vertical markets.

Companies use Matrics RFID readers and tags to help track inventory across the supply chain, ensure compliance in regulated industries, track the location of baggage throughout airports for security purposes and facilitate a more effective logistics process within the defense sector.

"As a global leader in enterprise mobility, Symbol is well positioned to build on Matrics' successes in the RFID industry," said Piyush Sodha, chairman and chief executive officer of Matrics. "As the RFID industry moves from pilot opportunities to enterprisewide deployments, the Symbol-Matrics combination will enable the Matrics RFID success to continue with the added benefit of Symbol's strengths in vertical markets, global sales and services, as well as advanced data capture, wireless networking and mobile computing."

Symbol intends to finance the acquisition with short-term borrowings under a new credit facility and expects to refinance the borrowings in a capital markets equity or equity-linked transaction later this year, market conditions permitting.