Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Apple Acquires Fingerprint Security Company AuthenTec for $356 Million

Apple quietly just closed the biggest deal it has done in quite some time. For the fingerprint security company AuthenTec, Apple will pay $356 million.

At that size, the deal isn’t material to Apple, and so it probably won’t bother to issue a press release. But since AuthenTec is public, it has to go through the motions of revealing the deal to its shareholders. AuthenTec shares closed yesterday at $5.07, and Apple is paying $8 a share, amounting to a 58 percent premium. Under the terms of the deal, AuthenTec will become a wholly owned subsidiary of Apple.

AuthenTec’s main stock in trade is fingerprint-sensor chips, and they’re used pretty widely across the industry. Hewlett-Packard is a customer, and offers its fingerprint scanners as an option on some notebooks.

But AuthenTec also has some solid meat-and-potato security products, as well. Samsung, for instance, chose AuthenTec’s VPN client to run on its smartphones and tablets.

So what does Apple want with it? It wants the team at AuthenTec to develop something just for Apple, and it’s paying that team $7.5 million to do it.
Exhibit 10-2, attached to AuthenTec’s 8-K filing with the SEC, includes a lengthy development agreement defining some work that AuthenTec is expected to do. Here’s the key quote:

The Restricted Information may be used solely for the purpose of developing a 2D fingerprint sensor for Apple that is suitable for use in an Apple product.

That’s pretty clear.

There’s also more money changing hands: Apple is paying $20 million for rights to certain patents, and then has an option to pay as much as $115 million for other patents it chooses.

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