Symbol to buy RFID pioneer Matrics for $230M

Symbol Technologies a leading manufacturer of bar code systems used in the retail, health care and transportation industries, is readying itself for the next wave of identification technologies with its planned US$230 million acquisition of Matrics, a maker of radio frequency identification tags and readers.

William Nutti, president and CEO of Symbol, said in a statement that the acquisition of Matrics is a "significant step in executing our plan to be a leader in RFID, and expands our offerings in the advanced data capture industry."

Nutti emphasized that Symbol plans to bring the same systems approach to RFID that it has applied to its bar-code business, including the use of wireless technologies to link RFID tag readers to back-end systems. United Parcel Service, for example, uses wireless bar code scanners from Symbol and Wi-Fi networks to help sort packages at 2,000 facilities worldwide.

Philip Lazo, vice president and general manager of Symbol's RFID division, said the Matrics acquisition will provide Symbol with technology and products as well as an experienced team of personnel to work with the Symbol RFID group. He also said Matrics has "traction" in key vertical markets that have embraced RFID, including retailers and the retail supply chain.

Privately held Matrics, which has 64 employees, has concentrated in developing RFID tags and systems that adhere to the Electronic Product Code standard developed by EPCglobal. That standard is used by major retailers in the US such as Wal-Mart Stores and Target.

Matrics has also pioneered the use of RFID for airline bag tags and has won contracts at McCarran International Airport in Las Vegas and Hong Kong International Airport.

Matrics will supply McCarran International with 100 million passive disposable RFID bag tags over a five-year period for US$25 million. In Hong Kong, it has a US$3.5 million contract to supply readers for the airport's RFID bag-tag system.

Delta Air Lines used RFID bag tags and readers from Matrics in two pilot tests of bag tag systems over the past two years, but the carrier has not yet selected a vendor for the systemwide rollout of the technology that it announced earlier this month.

Symbol's acquisition of Matrics comes with some baggage of its own.

Intermec Technologies filed a patent infringement suit against Matrics earlier this month. Intermec, which makes bar code readers and RFID readers and tags, alleged that Matrics has violated four of its "foundational" RFID patents.

Intermec declined to comment on what effect Symbol's acquisition of Matrics would have on that lawsuit. Lazo also declined to comment on how Symbol would handle the matter.

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