Security firm AuthenTec announced last month that it had been acquired by Apple. Now an SEC filing sheds a little more light on what Apple’s intentions might be. And why it might have been so anxious to complete the deal.
On July 27, seemingly out of nowhere, security company AuthenTec announced in a regulatory filing that it had agreed to a $356 million acquisition offer from Apple, making it one of the Apple’s biggest mergers in its 36 year history.
Now, with their SEC filing, the security firm has shed more light on why Apple wanted the firm, and why their need seemed so urgent.
In late 2011, AuthenTec began discussions with Apple, investigating if the Cupertino company would be interested in using a new technology it had developed. Despite offering the technology to numerous companies, Apple was the only firm actively pursuing an agreement with AuthenTec.
An agreement could not be reached, but then the complexion of the talks changed radically. On May 1, Apple decided it didn’t just want a commercial agreement, it wanted the entire company instead.
Apple offered $7.00 a share. A 115% premium over the closing price of AuthenTec’s common stock a day previous.
A timeline for the deal was proposed, and showed one important thing, Apple wanted AuthenTec’s technology, and they wanted it fast.
Apple’s representatives expressed the company’s desire to move quickly forward with the deal due to its “product plans and ongoing engineering efforts.”
Apple’s reps also informed AuthenTec that Apple would not participate in an auction process, and would withdraw its proposal if the company pursued alternative acquisition proposals.
Apple’s acquisition agreement also included an IP agreement that would allow it to use AuthenTec’s patents.
In the filing a mention is made of, “commercialization of 2D fingerprint sensors for use in or with Apple products.”
It could be safe to assume the new technology will be fingerprint related, which could fit in well with Apple’s new “eWallet” app, Passbook.
Passbook is an new app, rolling out with iOS 6, that will serve as a digital wallet of sorts. It will store tickets, coupons, and loyalty cards for iOS users and could also offer digital payments. The integration of fingerprint technology would only allow payment verification with biometric input.
AuthenTec announced on May 8, 2012 that it had introduced “its first smart sensor specifically tailored for secure NFC mobile commerce.” The product is a new 192 pixel by 8 pixel fingerprint sensor that includes “hybrid fingerprint matching, AES, RSA and SHA encryption blocks, and One Time Password (OTP) generation.” A sensor of this type could possibly be integrated into the home button on an iOS device.
With Apple’s urgency in finalizing the deal, it’s easy to imagine that they would like to include AuthenTec’s technology into upcoming iOS products.
AuthenTec’s experience offering desktop fingerprint sensors could also allow for a possibility of using the technology in Apple’s Mac line of computers.
The article at The Next Web goes into much more detail than space allows here. It makes for a compeling behind the scenes read into Apple’s reason, and urgency for acquiring AuthenTec.
