Taiwanese Display Maker Buys Cambridge’s E Ink for $215 Million
[Updated 9:45 a.m. June 1, 2009 with details from this morning’s press conference.] Cambridge, MA-based E Ink, the company that makes the electronic paper display used in Amazon’s Kindle e-book reading devices as well as e-book devices from Sony and other companies, will be purchased by Hsinchu, Taiwan-based display manufacturer Prime View International for $215 million, according to an announcement published today.
Prime View, also known as PVI, acquired the e-paper display division of Royal Philips Electronics in 2005, and makes a bistable e-paper display called “MagicMirror” that is similar to E Ink’s technology. But PVI has also been partnering with E Ink since 2005, and is the company that joins E Ink’s “VizPlex” electronic-ink film to the backplane components needed to control the displays. The combined E Ink-PVI product is then used in e-paper-based devices such as the Kindle 2, the forthcoming Kindle DX, and Sony’s PRS-505 reader.
Now, both the manufacturing capability and the intellectual property behind the E Ink displays will be under one corporate roof. In a press release published this morning, Russ Wilcox, E Ink’s CEO, president, and co-founder, said: “Combining E Ink and PVI creates a single public company that is dedicated to electronic paper. With a common ownership structure, we can get closer to customers around the world, streamline the supply chain, and speed up new product development.”
In fact, accelerating development of color versions and flexible versions of E Ink’s displays will be the primary benefit of the acquisition, according to Sriram Peruvemba, E Ink’s vice president of marketing, who spoke at a press conference today at the Society of Information Display trade show in San Antonio, TX. “Primarily, for E Ink, it’s about access to resources,” said Perevumba, who added E Ink will show prototypes of its color e-paper displays at the trade show tomorrow.
The combined company will be headquartered in Taiwan, but the acquisition will have “no immediate impact” on operations at E Ink’s Cambridge facility, according to Peruvemba. The deal is not expected to be finalized until the fourth quarter of this year.
Decisions about the status of E Ink’s top officers are “TBD,” Peruvemba said. “For the moment the plan is that all of the curent officers will be fully engaged in developing this business. The business is continuing to grow, and it’s pretty robust, so we can use all the help we can get.”
[This paragraph corrected, see below] In fact, Peruvemba said the company hopes to add more than 20 new employees* to its Cambridge operation this year, and is advertising open positions in sales, marketing, research, and engineering. “Every single day our lobby is filled with candidates,” he said.
E Ink has not shared financial details with the media in the past, but today Peruvemba said the company earned revenues of $18 million in the first quarter of 2009. PVI earned $54 million in the same period, he said.
The $215 million purchase price represents only a modest gain for E Ink’s investors, who include industry players like Intel, Motorola, Philips, Hearst Interactive Media, and Japan’s TOPPAN Printing. Altogether, backers have put more than $150 million into the company since its founding in 1997.
Scott Liu, chairman and CEO of PVI, said in this morning’s announcement that “The world is searching for green technology that saves energy and cuts waste and still provides an outstanding experience. E Ink’s electronic paper meets those needs, especially in electronic publishing and mobile displays. The people in both companies will unite to provide the world’s best digital reading experience and that will benefit all our customers and end users.”
Xconomy published an extensive interview with Wilcox about E Ink’s history and its recent innovations in February.
* Correction 2:00 p.m. 6/1/09: This article previously stated incorrectly that E Ink is hiring 150 new employees. In fact, it currently has about 127 employees, and plans to hire about 23 people this year, expanding to a total staff of 150.