Jun 10, 2016Global RFID technology manufacturer Invengo has acquired Tagsys' RFID Textile Services, as well as its Industrial and Logistics Tag divisions, at a cost of €6 million ($6.8 million). The acquisition includes Tagsys' Acuity platform, which consists of ultrahigh-frequency (UHF) tags (LinTrak, BluTAG and Mutrak), RFID reader stations (such as the u-Door and e-Way), and servers for industrial laundry applications in Europe.
The acquisition, the company reports, will strengthen Invengo's ability to serve Europe's textiles sector, and will give Invengo access to Tagsys' clients and contracts in Europe and around the world. Invengo will serve Tagsys' existing customers, as well as and any new ones, from its new Textile Services (TS) division in France. Invengo is also acquiring Tagsys' legacy RFID tag business, which includes an array of tags and designs used in such specialized applications as airline baggage handling, document and asset management, and pharmaceutical and health care.
Tagsys and Invengo initially announced the acquisition in April 2016, and then completed the transaction on May 13, though they did not make the deal's finalization public until this week. Invengo, based in Singapore, will now market the products it acquired from Tagsys as its own, while Tagsys, headquartered in Marseille, France, will focus its new generation of RFID products on the entire retail sector, including what Tagsys describes as the fast-growing luxury market.
According to an Invengo spokesperson, the acquisition provides the company with the opportunity to increase its role in textile services, and to reach out to health-care and hospitality companies. Invengo's new French presence will help it to expand its Acuity linen inventory-management platform in Europe. What's more, the spokesman says, the newly acquired entities will benefit from Invengo's design and manufacturing capacities. Invengo will also investigate the possibility of adding some of Tagsys' technology and custom tag offerings to its own InPower program.
According to Invengo, textile leasing in Europe is a large and growing market that includes washing services, primarily for hotels, hospitals and other health-care institutions, industrial enterprises and companies that lease uniforms and other kinds of fabric products. These items include bedding, bathrobes, towels, tablecloths and textile napkins.
Approximately 200 customers are currently using the Acuity platform in Europe. Invengo calculates that the size of the market for laundry business on that continent will reach €290 million ($327 million) each year. In the United States, the laundry business market totals $44 billion annually. Invengo has had a limited presence in the textile leasing market, the company reports, and is interested in growing that presence both in Europe and globally, including within the United States.
The transaction includes transfer of assets, as well as staff labor contracts and retirement benefits, and gives Invengo the right to use the Tagsys brand for commercial purposes.
Tagsys' motivation to sell some of its divisions to Invengo was driven by the company's growth in the textiles and industrial luxury brand and retail sectors, says Alain Fanet, Tagsys' CEO. "Clearly, these are markets where we have had big success," he states, and the company had begun considering what its next step would be.
"We knew we could continue with both markets as a private company, or partner with other players," Fanet says. But ultimately, Tagsys decided that focusing on luxury and retail technologies would help the company to foster partnerships with its customers. "If you look at the luxury market segment," he explains, "Tagsys is the leader, with the largest footprint in brand protection."
Invengo, Fanet adds, is one of the top five RFID companies, and is among the most prominent in the library and railway markets, making it a good choice to take over the textiles division and the other product groups. "That gives us the ability to focus on retail and luxury goods," he states.
Tagsys' industrial and logistics divisions had offered products for the health-care market, as well as for manufacturing, underground pipe tracking and various asset-management systems, which Invengo will now provide as well. During the early years following the company's founding in 2001, Tagsys focused on RFID products for libraries, uniforms and niche markets, but after Fanet joined the company in 2009, it began growing into the textiles and luxury markets as well.
In 2011, Tagsys released an end-to-end RFID solution, known as the Fashion Item Tracking System (FiTS), for the fashion and apparel market, including hardware, software, integration and maintenance services (see Tagsys Offers End-to-End Solution for Apparel Industry). The firm will focus on this product and others like it.
"Due to our legacy" in the niche markets, Fanet says, customers are still requesting the design of complex tags that, in the case of industrial and textiles applications, Invengo can now provide.
