RFID Implications Unclear from Nashua Acquisition

By Admin

RFID label converter Nashua is being acquired by graphics communications company Cenveo in a deal expected to close this summer. Nashua is not releasing details about how the acquisition will impact its RFID business, which provides smart labels to Printronix and other customers.

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This article was originally published by RFID Update.

May 11, 2009—RFID label producer Nashua is being acquired by Cenveo for $44.4 million plus assumption of Nashua's debt. The deal has been approved by the boards of directors of both companies and is expected to close this summer.

A Nashua spokesperson told RFID Update the companies are not commenting about how they will be brought together or on future implications for specific business units.

Nashua produces a variety of labels and specialty papers. It had revenue of $265 million in fiscal 2008 and said in its annual report that RFID sales were up $900,000 (but did not disclose total RFID sales). Nashua converts UHF and HF inlays from a variety of RFID chip producers into smart labels, and is the exclusive smart label manufacturer for Printronix. Nashua holds exclusive rights to market specialty RFID antennas from Fractal Antenna Systems (see Converter Licenses Innovative RFID Antenna Technology).

Cenveo is a $2.1 billion graphics communications company headquartered in Stamford, Connecticut that prints and provides envelopes, packaging, documents and other materials. Cenveo made no mention of RFID in its announcement, which said the acquisition would expand the range of products and services it offers and would strengthen its position in the pharmaceutical, shelf labeling, point of sale and wide-format printing markets. In its announcement, Nashua said its Label Products Division is a leader in the RFID label market, but made no further comment about its RFID business.

Nashua's RFID sales represent a small percentage of Cenveo's total revenues, so it is difficult to determine whether access to RFID markets was a major motivation for the acquisition. Despite Nashua's reported sales increase last year, business conditions have been challenging for label providers. Converter Mid South RFID recently told RFID Update "There's not enough volume in the UHF market for all of us," (see Mid South RFID Converts for Changing Market). Longtime industry leader Zebra Technologies recently discontinued its smart label production, and Alien Technology is reportedly considering closing its North Dakota inlay production facility, in part because the production method used there is inefficient for the current low level of production volume.