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Apple agreed in July 2012 to acquire biometric-security company AuthenTec for $8 in cash per eligible share. The headline figure of $350 million is rounded: a later U.S. Securities and Exchange Commission order described the cash transaction as approximately $355 million. The acquisition closed on October 4, 2012, making AuthenTec an Apple subsidiary.
What did Apple announce?
On July 26, 2012, AuthenTec entered into a merger agreement with Apple and Bryce Acquisition Corporation, a wholly owned Apple subsidiary. Under the agreement, Bryce merged into AuthenTec, which survived as Apple’s wholly owned subsidiary. The agreement’s stated consideration was $8 in cash, without interest, for each eligible AuthenTec common share, subject to exclusions and conditions in the agreement. The merger agreement sets out those mechanics.
AuthenTec’s board unanimously approved the agreement and recommended that shareholders adopt it. The transaction was subject to shareholder approval and applicable antitrust waiting periods and approvals. AuthenTec’s proxy said holders of a majority of the outstanding shares had to approve the merger. The proxy statement describes the approval process.
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Why is the deal described as $350 million?
The merger agreement did not set a single fixed total purchase price; it set consideration per eligible share. The approximate aggregate value depends on the shares covered by the transaction. The 2015 SEC order characterizes the cash acquisition as approximately $355 million, so “$350 million” is a rounded headline amount rather than the exact contractual price.
AuthenTec shareholders also saw different premium calculations in contemporaneous filings. Its 2012 proxy reported that $8 per share was a 57.7% premium to AuthenTec’s July 26 closing price. An investor Q&A from the same period gave 56.9% against the preceding day’s close. The sources therefore differ slightly; neither percentage should be presented without identifying its source and reference date. The proxy also reported premiums of 59.7%, 86.0%, and 149.2% against closing prices seven, 30, and 90 days earlier, respectively. AuthenTec’s investor Q&A stated the 56.9% figure.
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Why was Apple buying AuthenTec?
The public record establishes a fingerprint-technology context, but it does not establish Apple’s private motive. The SEC’s later order says Apple expressed interest in AuthenTec’s fingerprint sensor technology in late 2011, initially as it explored a commercial arrangement, and formally proposed an acquisition on May 1, 2012. AuthenTec’s proxy describes related agreements involving hardware technology, software technology, patents, and commercialization of 2D fingerprint sensors for use in or with Apple products. Those documents make fingerprint technology a documented part of the deal’s context; any broader explanation of Apple’s strategy remains an inference.
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AuthenTec made the limit explicit in its investor Q&A: “AuthenTec cannot comment on Apple’s intentions.” The Q&A also said, “Apple will implement its plans for AuthenTec’s businesses after the transaction closes.” Neither statement is an explanation from Apple of its acquisition rationale.
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- It’s also wireless and rechargeable, with an incredibly long-lasting internal battery that will power your keyboard for about a month or more between charges.
- It pairs automatically with your Mac, so you can get to work right away.
- It features a USB-C port and includes a woven USB-C Charge Cable that lets you pair and charge by connecting to a USB-C port on your Mac.
How did the technology agreements differ from the acquisition price?
The merger consideration was separate from agreements covering technology rights and engineering services. AuthenTec’s proxy described a $20 million payment for the right to acquire specified non-exclusive licenses and other rights. It also gave Apple 270 days to elect additional perpetual, non-exclusive rights for up to $115 million in total: $90 million for hardware and patent rights, and $25 million for software and patent rights.
A separate development agreement covered non-recurring engineering services for product development, for up to $7.5 million. AuthenTec’s 2012 Form 8-K said new intellectual property resulting from those services would be owned by Apple. These were distinct contractual arrangements, not additions to the $8-per-share merger consideration. The proxy statement details the technology-rights terms, while AuthenTec’s Form 8-K describes the development services.
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- Magic Keyboard with Touch ID and Numeric Keypad delivers a remarkably comfortable and precise typing experience
- It features an extended layout, with document navigation controls for quick scrolling and full-size arrow keys, which are great for gaming
- The numeric keypad is also ideal for spreadsheets and finance applications
- It’s wireless and features a rechargeable battery that will power your keyboard for about a month or more between charges
What happened to AuthenTec’s business?
The merger made AuthenTec a wholly owned Apple subsidiary. The contemporaneous investor Q&A did not spell out Apple’s plans for the company’s existing businesses; it said those plans would be implemented after closing. The filings cited here document the acquisition, fingerprint-related technology arrangements, and development services, but do not provide a detailed public account of how every AuthenTec business or product was handled afterward.
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