Symbol Tech may sell equity-linked securities to partly fund $230 million acquisition of Matrics

By Ronda Fears

Nashville, July 27 - Symbol Technologies Inc., or The Enterprise Mobility Co., said Tuesday that it has reached an agreement to acquire privately held Matrics Inc., a leader in the design and manufacture of electronic product code-compliant radio frequency identification systems for $230 million in cash, and as part of the funding it plans a capital markets equity or equity-linked transaction later this year.

"The acquisition of Matrics is a significant step in executing our plan to be a leader in RFID [radio frequency identification], and expands our offerings in the advanced data capture industry," said William Nuti, chief executive of Symbol Tech, in a company statement.

"We believe that in order for RFID to be deployed successfully, it needs to be deployed as a system - a system that allows customers to capture, move and manage critical information to and from the point of business activity. By incorporating the Matrics EPC [electronic product code] compliant RFID products into Symbol's portfolio of industry leading mobile computing, advanced data capture and wireless technologies, Symbol can help customers in key market segments gain operational efficiencies in their supply chains and realize competitive advantage."

Symbol Tech said it intends to finance the acquisition with short-term borrowings under a new credit facility and expects to refinance the borrowings in a capital markets equity or equity-linked transaction later this year, market conditions permitting.

The acquisition is expected to close in third quarter.

As a result of the acquisition, Symbol Tech said it expects dilution to 2004 earnings per share of recurring operations of Matrics, including costs to finance the transaction, to be in the range of $0.05-$0.06 per diluted share, excluding charges and purchase accounting adjustments.

Symbol also expects the dilutive effect to diminish in 2005.

Holtsville, N.Y.-based Symbol Tech provides secure mobile information systems that integrate application-specific hand-held computers with wireless networks for data, voice and bar code data capture.

Matrics provides EPC-compliant RFID systems for retail, defense, transportation and other vertical markets. Its RFID readers and tags are used to help track inventory, ensure compliance in regulated industries, track the location of baggage throughout airports for security purposes and facilitate a more effective logistics process within the defense sector.

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