Mobile and network security company AuthenTec announced this morning it has agreed to an acquisition offer from Apple for $8 a share. The figure represents close to a 60 percent premium above Thursday’s closing price ($5.07) and values the firm at around $365 million.
AuthenTec specializes in fingerprint sensor chips that are used for security and identification purposes as well as VPN solutions for enterprises. Their products are used in computing devices from the likes of HP and Lenovo, among others, and recently their focus was increasingly shifting to the mobile market.
Just earlier this month, AuthenTec signed a deal with Samsung to implement its VPN technology on the company’s smartphones and tablets, a move designed to cater to the increasingly popular “BYOD” trend -- that is, letting workers bring their own handsets into the enterprise environment.
But apparently with only $20 million in cash and equivalents on hand, AuthenTec couldn't bulk up and invest if it wanted to be a real mobile security player. The company was an acquisition target and Apple, acknowledging the rapid adoption of the iPad in the enterprise, decided to swoop in ahead of its rivals.
The deal includes a $20 million payment to “acquire non-exclusive licenses and certain other rights with respect to hardware technology, software technology and patents”, as well as a clause for licensing IP on a “non-exclusive basis” for $115 million. Apple will also pay an additional $7.5 million solely for the purpose of “developing a 2D fingerprint sensor for Apple that is suitable for use in an Apple product.”
At this point it’s unclear exactly how Apple plans to implement AuthenTec’s technology into its products but it seems the company is looking to further bolster its relevance in the enterprise sector -- and perhaps make it harder for businesses to adopt Android at the same time if it chooses to end existing deals.
The acquisition still requires the approval of shareholders and regulators. It may not be all smooth sailing as a 61 percent surge in AuthenTec’s shares this morning has already sparked speculation that a higher suitor may step in. AuthenTec would have to pay Apple a breakup fee of $10.95 million in that case.