Chinese Company Announces Plans to Invest in Alien Technology

By Claire Swedberg

Century is among five firms that sell RFID products and are forming a joint venture for purpose of purchasing a percentage of the U.S. RFID company.

Century, a publicly held Chinese technology solutions and services company, has announced that it and four others companies intend to purchase a percentage of Alien Technology, a major provider of RFID tags, chips and readers based on the EPC Gen 2 standard. In accordance to Chinese regulations, Century publicly filed its plan to invest in Alien, as part of a joint venture that includes several other companies, some of which are not Chinese. The investment figures, as planned, total $68.63 million, with $35 million from Century itself and $33.63 million from the other potential investors, according to news reports regarding Century's public filing.

Alien Technology, a privately held company based in Morgan Hill, Calif., verified that it is in discussion with these potential investors. However, it declined to indicate a closing date or confirm the sales figures listed in China. Alien technology was founded in 1994 and sells a wide variety of UHF RFID passive RFID tags and inlays, as well as fixed and mobile readers. It also provides services and training out of its office in Dayton, Ohio. The company has more than 1,500 customers worldwide.

"Alien has been seeking funding for expansion and growth in the [RFID] market," says Patrick Ervin, VP of worldwide marketing and sales at Alien. At the same time, he says, the potential investors with which Alien is in discussion, including Century, all play some part in the RFID industry and have been "bullish" in their efforts to invest. "These new investors believe in the future growth of the market."

The investments will enable Alien to further expand its products and worldwide presence. However, Ervin says he could not yet speak about what that expansion might consist of. "We do have things we're excited about," he says, that would be made public in the future.

Century provides electronic article surveillance (EAS) solutions and services to the retail sector, and also sells woven RFID labels and other RFID products, including RFID-based electronic shelf labels and RFID-enabled magic mirrors.

"We can say that we are engaging with several strategic investors, and Century is one of those," Ervin says. "But we can't say what percentage of the company they will end up with."

Alien has been experiencing demand growth for its EPC tags and readers, especially from retailers, and the company expects further growth in this year in the U.S., based on patent resolutions with Round Rock Research (see Avery Dennison, Alien Technology and Invengo Sign Licensing Deals With Round Rock ). Worldwide there has also been growth in a variety of markets beyond the retail sector, says Neil Mitchell, Alien's VP of business development, although he did not provide details. "We've had a great start to this quarter," says Ervin.

Once the deal is completed, Alien will continue to operate out of its existing locations, which include the United States, China, Korea, and other parts of Asia, Europe and Australia.

Companies that have already invested in Alien Technology and therefore share ownership of the company include Advanced Equities, New Enterprise Associates, Rho Venture and Sunbridge Partners. Those current investors, Ervin says, will retain majority ownership of the company. Alien Technology intends to issue a public announcement of the new investors and terms once the companies close on the transaction.