Thinfilm's acquisition of Kovio assets, supplemental information
Thin Film Electronics ASA (Thinfilm) on 13 January 2014 disclosed a conditional agreement to acquire assets and intellectual property rights from Kovio Inc. (Kovio). The transaction was completed in the early morning on 22 January 2014 (CET) and announced on the Oslo Stock Exchange before the market opened on 22 January 2014. This disclosure contains certain supplementary information on the transaction.
Transaction
Thinfilm has through the agreement acquired certain of Kovio's assets. A conditional agreement was entered into on 10 January 2014 and the transaction was completed in the early morning on 22 January 2014 CET (21 January 2014 PST) when all conditions were fulfilled. The parties in the agreement are Thinfilm, Kovio and Kovio's bank.
Purchase price
The purchase price amounts to 2,700,000 USD in cash and 1,000,000 USD in shares. The cash portion has been paid in full using existing funds and the consideration shares will be resolved issued by the Board of Directors in Thinfilm under the existing board authorization to issue shares from the general meeting, which resolution will be made upon finalization and presentation to the Board of an expert statement from an independent auditor as to the non-cash share contribution. The shares are issued at 5.92 NOK per share and a total number of 1,041,584 shares will consequently be issued.
Acquired assets
Thinfilm acquires Kovio's technology, intellectual property, and manufacturing assets located in San Jose, California, USA. Kovio has also assigned certain contractual rights to Thinfilm, e.g. the property lease in San Jose. In conjunction with the transaction, 23 former Kovio employees have resigned from Kovio and have been employed by Thinfilm. The property lease is assumed, and the employees are retained, by Thinfilm's US subsidiary, Thin Film Electronics, Inc.
Implications of the transaction for Thinfilm
Reference is made to the Oslo Stock Exchange announcement on 22 January 2014. Integration of Kovio technology accelerates time-to-market for NFC labels, and expands both Thinfilm's manufacturing capacity and intellectual property portfolio. The transaction is hence strategically very important for Thinfilm as it will allow the seamless exchange of information between Thinfilm's Smart Labels and NFC-enabled phones and tablets.
Other agreements in connection with the transaction
In conjunction with the transaction Kovio's CEO and General Counsel are expected to provide services to Thinfilm for a transitional period.