Apr 06, 2006This article was originally published by RFID Update.
April 6, 2006—RFID reader manufacturer Sirit of Toronto this morning announced the acquisition of the assets of SAMSys, another RFID reader manufacturer based in Ontario, Canada. Financial details of the transaction were not disclosed.
The acquisition happened swiftly after SAMSys late last week announced that it was for sale. According to a CBC article, the company and its financial advisors had previously sought a buyer that could purchase the company "in a timely manner in light of the Company's current circumstances".
The "circumstances" apparently refer to SAMSys' cash-on-hand, which had dipped below a minimum threshold that the company and its creditor had agreed it must remain above while the company maintained outstanding debt. According to TechFinance.ca, the creditor, Wellington Financial Fund II, demanded repayment last Tuesday, and SAMSys had to scramble to find a buyer. Proceeds from the sale will go toward paying back Wellington. The company said that "there will not be sufficient funds left to satisfy other claims or make any distributions to its shareholders". Sirit will purchase the company assets through a court-appointed receivership process, agreed to by both SAMSys and Wellington. The acquisition is contingent on pending approval by the Ontario Superior Court of Justice and a completion target date of April 13th.
Late last year, SAMSys named a new president and CEO, Tom Dziersk, who had also been appointed to the board. Amid the recent chaos, Dziersk left the board, although he retains his executive role at the company. SAMSys was planning a major product announcement in May, which Dziersk discussed with RFID Update in an interview last month (read the article).
Sirit will absorb the SAMSys technology and product line into its own RFID reader portfolio. Sirit CEO Norbert Dawalibi said in a statement, "Execution of the agreement brings with it the opportunity to broaden our customer base, expand our RFID product offerings, and increase our geographical reach, all of which strengthens Sirit's ability to meet new market opportunities around the world." Both Sirit (ticker symbol: SI) and SAMSys (ticker symbol: SMY) are publicly traded companies on the Toronto Stock Exchange.
Sirit has not historically competed aggressively in the EPC RFID market, with a majority of its product line geared for electronic tolling, traffic management, and parking and access control. Its most recent sales announcement was for toll tags to the South Bay Expressway in San Diego County, California. The company also announced in February that it would purchase TradeWind Technologies, a Tennessee-based manufacturer of high frequency RFID readers, for $2 million Canadian (approximately $1.7 million US). That acquisition was completed just yesterday.
