SAN JOSE, Calif. - After a failed hostile takeover attempt, two fingerprint chip rivals have made up and finally merged.
AuthenTec Inc. has acquired Upek Inc., thereby creating the world’s largest provider of fingerprint sensors and identity management software.
The combined entity, to be named AuthenTec, will remain headquartered in Melbourne, Fla. It will be led by newly named CEO Larry Ciaccia, who previously served as AuthenTec’s president and chief operating officer.
Scott Moody, co-founder of AuthenTec and CEO since its inception, will continue as a member of the board. He will be joined on the AuthenTec board by two new directors from Upek: Ronald Black and Jean Schmitt. Black was chairman and CEO of Upek.
Under the terms of the transaction, Upek's shares will be exchanged for approximately 5.9 million shares of AuthenTec’s common stock and a convertible promissory note in the aggregate principal amount of $21.6 million that will be satisfied by either the issuance of approximately 8.0 million additional shares of AuthenTec common stock or the repayment of the principal amount of the note by March 1, 2011, subject to a one-time extension of up to 60 days.
Issuance of the additional shares is subject to shareholder approval, and AuthenTec will hold a special meeting of shareholders as soon as reasonably practicable to allow shareholders to vote upon the conversion into AuthenTec shares of the convertible promissory note. If shareholders approve the conversion, and shares are issued to satisfy the note, Upek shareholders would own approximately 31% of the combined company. The transaction has been approved by the boards of both companies.
Ironically, earlier this year, Upek, a supplier of biometric fingerprint devices, launched an unsolicited bid to buy rival AuthenTec. AuthenTec managed to fight off the bid.