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Smartrac Acquires UPM RFID, Becoming a UHF Tag Leader

With its acquisition of UPM RFID, as well as Neology and KSW Microtec, Smartrac has moved to the front of the market for passive UHF RFID tags and inlays.
By Claire Swedberg
Because of this acquisition, Moehler says, "Our customers will benefit from a larger product portfolio, a strong team and greater technology range."

Neology manufactures customized RFID transponders, and also provides UHF RFID solutions focused on the electronic vehicle registration and electronic toll-collection markets. Smartrac acquired the company for $30 million, and purchased KSW Microtec, based in Dresden, Germany, for €24 million ($31.3 million). KSW Microtec produces and sells HF and UHF RFID inlays, as well as prelaminates and components for RFID tags used with sensors, and for border-crossing cards in Europe. Due to the merger, Smartrac gains not only KSW's product portfolio, but also its customers in Germany and its manufacturing facility in Reichshof-Wehnrath.

These acquisitions afford Smartrac greater manufacturing capability, the company reports, though how that will be managed has yet to be determined. On the day of the announcement (Dec. 22), Kraev says, the value of Smartrac stock, which is listed on the Frankfurt Stock Exchange (Prime Standard), closed down, dropping by 0.88 percent, on a day when the majority of European stocks closed up—which could indicate some concern regarding how the company will integrate its new acquisitions. Initially, Liard predicts the coexistence of UPM RFID's inlay manufacturing and Smartrac's manufacturing of its own transponders.

Other questions remain with regard to the integrated circuit providers for Smartrac, Kraev says, noting that UPM RFID currently uses chips from NXP Semiconductors and Impinj, while Neology utilizes Alien Technology chips.

For customers and partners in the UHF market, Liard says, the consolidation of the companies' technologies could mean a drop in tag pricing. "We've been watching for these kinds of consolidations in the industry," he states, adding that as technology demand grows, vendor acquisitions are common, frequently leading to portfolio consolidations such as that of Smartrac and UPM RFID, which can now manufacture UHF and HF inlays, as well as RFID transponders, for a variety of applications. "Now it seems to actually be happening." The next acquisitions to take place within the RFID industry, Liard projects, will likely involve companies that provide RFID-based software solutions.

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