Symbol Scoops Up Matrics - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Hardware & Infrastructure

Symbol Scoops Up Matrics

The deal jump-starts the bar-code vendor's entry into the RFID market.

Symbol Technologies Inc. on Tuesday said it has agreed to acquire wireless tag maker Matrics Inc. for $230 million in cash for its expertise in radio-frequency identification technology. The deal is expected to close in the third quarter.

For a company with roots in bar-code and handheld-computer technology, the deal jump-starts Symbol's efforts to get into the RFID space. Symbol in the past had suggested it had planned to provide a complete data-collection infrastructure that would include handheld and fixed RFID readers and software that integrates RFID and bar-code data that flows through enterprise systems.

Symbol's acquisition may herald the beginning of consolidation in the RFID market. "We are going to see consolidation in the reader and tag industry where Symbol and [wireless data collection vendor] Intermec [Technologies Corp.] pick up the smaller vendors," says Gene Alvarez, VP technology research services at Meta Group.

Matrics has been hit with a lawsuit by Intermec, charging patent-infringement issues related to Intermec's RFID intellectual property. But that didn't deter Symbol from making the acquisition; in fact, Intermec has been paying Symbol royalty fees related to bar-code-scanning technology for years.

Analysts see the move as strategic because the RFID market is unfolding quickly as companies begin to view the creation of business processes around RFID as a competitive advantage. Companies are already seeing returns on investments for their RFID implementations, though many are reluctant to speak about them, analysts say.

Symbol said it will finance the acquisition with short-term borrowing. The company said the transaction should dilute earnings per share in 2004 by 5 or 6 cents. Wall Street analysts expect Symbol to earn 44 cents per share for the year on revenue of $1.75 billion. "Symbol has to take on debt or issue equity to make this acquisition, and it doesn't sound like they will do much to change Matrics' infrastructure, and my assumption is Matrics is currently losing money," says Reik Read, an analyst at equity research firm Robert W. Baird & Co. "Matrics isn't generating much revenue today, maybe $4 million to $7 million annually, and I don't expect a huge revenue ramp until late 2005."

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
News
COVID-19: Using Data to Map Infections, Hospital Beds, and More
Jessica Davis, Senior Editor, Enterprise Apps,  3/25/2020
Commentary
Enterprise Guide to Robotic Process Automation
Cathleen Gagne, Managing Editor, InformationWeek,  3/23/2020
Slideshows
How Startup Innovation Can Help Enterprises Face COVID-19
Joao-Pierre S. Ruth, Senior Writer,  3/24/2020
Register for InformationWeek Newsletters
Video
Current Issue
IT Careers: Tech Drives Constant Change
Advances in information technology and management concepts mean that IT professionals must update their skill sets, even their career goals on an almost yearly basis. In this IT Trend Report, experts share advice on how IT pros can keep up with this every-changing job market. Read it today!
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll