Apple to Acquire AuthenTec for $356 Million
Apple has found one way to shrink its huge pile of cash.
The iPhone maker has agreed to acquire AuthenTec, a mobile security company, for $356 million in cash, according to a filing. Apple will pay AuthenTec’s shareholders $8 per share, a 60 percent premium above Thursday’s closing price.
The deal will put a small dent in Apple’s cash supply, which stood at more than $117 billion at last count. But AuthenTec, which designs fingerprint sensors and other security products for mobile devices, could help Apple bolster the security of its products, which have been major targets for criminals and malicious software attacks. Years ago, Apple computers were once known for their lack of viruses, but the incredible popularity of its devices has been a siren for bad agents, seeking to extract private financial information or merely wreak havoc on the digital lives of consumers.
Security is also becoming a critical issue for Apple, as the company plays a bigger role in the workplace. As more businesses buy iPhones and iPads for their employees, more are also seeking solutions to protect their devices.
Founded in 1998, AuthenTec specializes in fingerprint scanning technology. Its broad range of sensors, which can be embedded into computers, can read the image of a fingerprint and can also detect motion and patterns. For businesses, it offers standalone fingerprint readers that can be attached to computers to enhance log-in security. According to its Web site, AuthenTec’s has shipped more than 100 million sensors to date. Its clients include several major smartphone makers, such as Motorola, Nokia and Samsung, which is currently embroiled in a bitter patent fight with Apple.
Indeed, the purchase of AuthenTec and its patents may give the iPhone maker an extra edge against its rival. Earlier this month, Samsung and AuthenTec announced that handset maker would use an AuthenTec product in its upcoming line of Android smartphones and tablets.
Under the acquisition, Apple will pay $20 million for the right to buy non-exclusive licenses and “certain other rights with respect to hardware technology, software technology and patents,” according to the filing. Apple will have 270 days to decide to license certain technology and patents on a “non-exclusive basis for an aggregate sum of up to $115.0 million.”
The acquisition is Apple’s second biggest, after the $400 million purchase of Anobit Technologies last year, according to Standard & Poor’s Capital IQ.
According to Friday’s filling, if AuthenTec opts for a superior bid from a rival company, it will pay Apple $10.95 million. However, if the deal does not close because of antitrust issues, Apple will pay AuthenTec $20 million.
AuthenTec hired Piper Jaffray to serve as its financial adviser and Alston & Bird to be its legal adviser.