Seven years ago OTI - On Track Innovations Ltd. (Nasdaq: OTIV; DAX: OT5) acquired the electronic ID (smart ID cards and passports) division from SuperCom Inc. (Bulletin Board: SPCBF) for $20-25 million. Seven years on, there have been many changes at the two companies. Today, a reverse transaction was made: SuperCom bought OTI's SmartID division, which is based on the same assets it bought in 2006.
The size of the deal is similar, subject to the division meeting milestones. SuperCom will pay $10 million, and an additional $12.5 million, subject to the division's future performance. SuperCom believes that there is strong synergy between the activities. The acquisition will include all of the division's technologies and contracts. Scores of the division's employees will join SuperCom when the deal is closed.
The SmartID division has $20 million in annual revenue, compared with SuperCom's $9 million revenue in 2012.
"The acquisition will triple our revenue base, greatly increase our profitability, and will strengthen our position in the EID market," said SuperCom CEO Arie Trabelsi.
SuperCom is active in two fields - EID and RFID. EID is the issue of electronic documents, and RFID is an alternative technology to barcodes. SuperCom has a market cap of $28 million, and is planning a reverse share split to meet Nasdaq listing conditions and return to it. After a multifold jump in its share price, the company plans to raise $20 million, in part to finance acquisitions.
SuperCom's largest shareholder is private equity firm Sigma Wave Ltd. (44%), which is also interested in acquiring Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) from its receivers. An option under consideration is to acquire Alvarion through SuperCom.
Published by Globes [online], Israel business news - www.globes-online.com - on August 14, 2013
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