Apple buying AuthenTec for about $356 million

Jul 27, 2012
Apple has bought mobile security firm AuthenTec for around $350 million, giving the gadget maker technology including data protection and fingerprint security for mobile devices.

(AP) — Apple has agreed to buy fingerprint reader AuthenTec Inc. for approximately $356 million as the maker of iPhones and iPads looks to strengthen its digital security capabilities.

Apple's acquisition comes as consumers use their smartphones for more and more daily activities, including shopping.

"As cellphones become essentially credit cards, consumers will look to secure them in the event of theft or loss. AuthenTec's fingerprint sensors offer one way to secure handsets," said Raymond James analyst J. Steven Smigie.

It's not known what Apple's plans are. Rival devices running Google's Android system are starting to come with a wireless technology that can let phones make payments with the tap of a reader. Apple's patent filings hint at an interest in the technology, known as near-field communications, but the notoriously secretive company has given no clue when the technology might show up in iPhones. A new model is expected this fall.

Beyond protecting payments, a fingerprint system could keep unauthorized people from accessing email, contact lists and more. Current phones offer protection through passwords, which can be guessed or forgotten.

AuthenTec said Apple Inc. is paying $8 for each of its common shares, a 58 percent premium to their closing price on Thursday.

AuthenTec's stock jumped $3.27, or 65 percent, to $8.34 in Friday afternoon trading, above Apple's offer. That could suggest investors think there will be a higher bid for the company.

The deal was unanimously approved by AuthenTec's board. It still requires approval from a majority of the holders of the Melbourne, Fla., company's stock. AuthenTec has about 44.5 million outstanding shares, according to FactSet.

A higher offer for AuthenTec is possible. In a regulatory filing, AuthenTec said it's not allowed to actively seek out other offers, but it could hold talks with other parties before its stockholders approve Apple's buyout terms.

If AuthenTec does wind up accepting a superior offer, it would have to pay a breakup fee of approximately $11 million.

While Apple said earlier this week that its growth rate slowed in its latest quarter, massive sales of its iPhones and iPads in recent years have made it the world's most valuable company. It's the third-largest maker of cellphones, according to research firm Gartner, and dominates the market for tablet computers.

Shares of Apple, which is based in Cupertino, California, added $10.23, or 1.8 percent, to $585.11.

Explore further: Amazon launches 3D printing store

2.7 /5 (6 votes)
add to favorites email to friend print save as pdf

Related Stories

Security holes discovered in iPhones, iPads

Jul 08, 2011

A new security hole has opened up in Apple Inc.'s iPhone, iPad and iPod Touch devices, raising alarms about the susceptibility of some of the world's hottest tech gadgets to hacker attacks.

Apple, Google to attend hearing on mobile privacy

May 16, 2011

US lawmakers have invited Apple, Facebook and Google to attend a hearing on mobile phones and privacy on Thursday -- the second Capitol Hill appearance in a week for executives from Apple and Google.

Recommended for you

BlackBerry to buy Germany's Secusmart

3 minutes ago

(AP)—German voice and data encryption specialist Secusmart, which helps equip the German government with secure smartphones, says it's being acquired by BlackBerry for an undisclosed sum.

India's Flipkart raises $1 bn to tackle Amazon

1 hour ago

India's top e-commerce company Flipkart said Tuesday it had raised $1 billion (60 billion rupees) in funds as it battles US giant Amazon for supremacy in the hyper-competitive local market.

Aetna 2Q profit rises 2.4 percent

5 hours ago

Aetna's second-quarter profit climbed more than 2 percent, as gains from an acquisition helped the health insurer beat analyst expectations and raise its 2014 earnings forecast again.

Merck 2Q profit more than doubles

5 hours ago

A big one-time gain and a tax benefit helped drugmaker Merck & Co. more than double its second-quarter profit, raise the lower end of its profit forecast and easily top analysts' expectations.

User comments : 0