E Ink Acquired By PVI
E Ink, the company that supplies e-readers like Sony's Reader and Amazon's Kindle with their e-paper display, has been acquired by Prime View International (PVI) for $215 million.E Ink, the electronic paper company that provides the electronic display technology used by Amazon's Kindle e-reader (among others) announced its primary business partner, Taipei, Taiwan-based Prime View International (PVI), has acquired it for $215 million.
E Ink and PVI currently support nearly 20 eBook manufacturers worldwide. In addition to electronic books, E Ink's Vizplex imaging film is used in cellphones, signage, smartcards, memory devices and battery indicators. E Ink said it will continue to supply its products across the display industry and will have access to increased operating funds to boost production and accelerate new technology and product developments.
With the merger, PVI gains E Ink's intellectual property and employee talent, while securing supply of a critical component and adds alliances and relationships across the ePaper and flexible display industry. In 2008, PVI bought a 74 percent stake of Hydis Technologies of Korea, quadrupling capacity for the transistor backplanes used in ePaper.
"The world is searching for green technology that saves energy and cuts waste and still provides an outstanding experience," said PVI's chairman and CEO Scott Liu. "E Ink's electronic paper meets those needs, especially in electronic publishing and mobile displays. The people in both companies will unite to provide the world's best digital reading experience and that will benefit all our customers and end users."
E Ink said the deal is the capstone in a transformation at PVI over the past four years to focus on electronic paper displays. In 2005, PVI acquired the ePaper business of Philips Electronics and partnered with E Ink to provide displays for electronic books including the Sony Reader and the aforementioned Kindle 2 and Kindle DX. PVI also invested in dedicated driver chips and touch screens for ePaper, as well as flexible displays, which the company said would be marketed later this year.
iSuppli analyst Vinita Jakhanwal said the market for electronic book devices such as the Reader and Kindle is forecasted to grow from 1.1 million units in 2008 to 20 million units in 2012, a cumulative annual growth rate of 105 percent over the four-year period. "PVI and E Ink enabled this market back in 2005 and they have been the display market leaders ever since," Jakhanwal said.
PVI will finance the acquisition with an equity placement and a convertible bond offering led by Taiwanese securities firm KGI. The transaction is subject to shareholder and customary regulatory approval and is expected to close in the fourth quarter of 2009. E Ink sales were $18 million in the first quarter of 2009, up 157 percent over the same quarter in 2008.
"Combining E Ink and PVI creates a single public company that is dedicated to electronic paper," said E Ink's co-founder, president and CEO Russ Wilcox. "With a common ownership structure, we can get closer to customers around the world, streamline the supply chain, and speed up new product development."