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Consolidation in the RFID Industry Continues

It remains to be seen whether the many recent acquisitions will turn out to be good news for end users and shareholders.
By Mark Roberti
Dec 16, 2015

During the past three years, the RFID industry has undergone a steady wave of consolidation, with larger, more established companies often acquiring smaller RFID-focused firms. In some cases, the acquisitions were aimed at building out complete product portfolios. Motorola Solutions, for example, began the recent spate of acquisitions when it purchased Psion, a maker of handheld RFID and bar-code readers, in June 2012. This gave Motorola, which had earlier acquired Symbol Technologies, a strong position in the market for handheld RFID and bar-code readers.

Honeywell, its chief competition in the bar-code industry, responded by buying Intermec for $600 million in 2012. Honeywell had earlier acquired the bar-code equipment maker Metrologic and added LXE, a maker of rugged RFID devices, in 2011. Grabbing Intermec gave Honeywell the size and strength to compete with Motorola in the auto-ID industry. Motorola subsequently split apart and sold its enterprise division, which included its RFID and bar-code equipment, to Zebra Technologies.

Illustration: John Hull/RFID Journal
Some acquisitions were designed to add RFID capabilities to existing portfolios. Stanley Healthcare Solutions, for example, purchased AeroScout so it could offer AeroScout's Wi-Fi-based real-time location system to existing hospital customers. And in August 2013, Cardinal Health, the pharmaceutical distributor, purchased WaveMark's passive high-frequency tracking system, used to monitor inventories of implantable devices, drugs and other hospital consumables (bandages, gauze and so on). Cardinal offers IT and supply-chain services to hospitals, so this was a way to bring RFID into its product mix.

RFID companies focused on the retail space have been making acquisitions to expand their product portfolio or their reach into new markets. The SML Group, a Hong Kong-based apparel branding company, purchased CGP Labels in 2012, to provide RFID labels for clothing. A year later, the company acquired Xterprise, which provided software to American Apparel and other retailers. These moves positioned SML as a company that could offer apparel manufacturers and retailers a complete solution.

In January 2015, Tyco Retail Solutions purchased Creative Systems, a European-based RFID solution provider that implemented one of the earliest item-level deployments, at a bookstore in Portugal. The move mainly enabled Tyco to compete more effectively in Europe.

A month later, the ITL Group, an international retail apparel label solutions company owned by SA Bias Industries, announced it had acquired a majority shareholding in Canadian RFID software firm Overheer Systems, which also focused on the retail market. ITL said the acquisition was central to its larger strategy of offering retailers an end-to-end RFID solution. The company integrated Overheer Systems' cloud-based, item-level RFID application, Reflect RFID, into its existing LabelVantage IT online platform, which retailers can use to optimize their global supply chain.

Then, in April, r-pac International acquired Truecount's software. The apparel branding firm, which competes with SML, announced plans to create a new division, r-pac Retail Services. Its goal is to be a one-stop, single resource for retailers and the retail supply chain.

Retailers and apparel manufacturers should benefit from the ability to get all the RFID hardware, software and services they need from a single supplier. But previous acquisitions have often led to good companies being swallowed up and never heard from again, so it remains to be seen whether these acquisitions will turn out to be good for end users—and, in the case of public companies, shareholders as well.

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