Apple Inc. moved late Thursday to boost its expertise in fingerprint-authentication technology, agreeing to buy AuthenTec Inc. for $356 million in cash.
Terms of the deal call for Cupertino, Calif.-based Apple to pay $8 per share for AuthenTec, a premium of 58% over the target's Thursday close. Apple also as part of the deal has the option to pay up to $115 million for patent licenses.
The purchase carries a termination fee of $10.95 million payable to Apple should AuthenTec accept a superior bid, and a $20 million fee payable to AuthenTec if Apple is unable to close the deal because of antitrust concerns.
AuthenTec, of Melbourne, Fla., makes chips and software that enable devices to recognize fingerprints, a security measure that can be difficult to hack. The company also has a line of near-field communications chips that allow multiple devices to communicate and share information including for payments.
The company reported Ebitda of $707,000 on sales of $71 million in the 12 months ended March 30, largely from Apple competitors.
AuthenTec's customer list includes Samsung Corp., the leading maker of smartphones running on Google Inc.'s Android platform, as well as computer makers Lenovo Group Ltd. and Dell Inc. Samsung just last week announced it had selected AuthenTec for use in its new Android smartphones and tablets.
Neither Apple nor AuthenTec offered any comment on the deal, which was disclosed in a Securities and Exchange Commission filing.
Apple, despite a massive stockpile of more than $110 billion of cash and equivalents on its balance sheet, does very little M&A.
However, the company late last year purchased Anobit Technologies Ltd. for an undisclosed sum, and was part of consortia that in 2011 acquired intellectual property and patents from both Novell Inc. and Nortel Networks Inc.
AuthenTec paid $4.9 million to acquire Atrua Technologies Inc. in 2009 and spent $11.3 million in 2010 for the embedded security solutions division of SafeNet Inc.
Piper Jaffray & Co. and an Alston & Bird LLP team led by W. Scott Ortwein and Justin Howard advised AuthenTec. Apple was advised by Weil, Gotshal & Manges LLP's Kyle C. Krpata and Howard Chatzinoff.