Invesco to take $23m stake in security label firm Thinfilm

UK investment group Invesco has made a $23m offer for a 13per cent stake in Norwegian security label specialist Thinfilm Electronics.

Thinfilm specialises in printed electronics and claims to have been the first company to commercialise a printed rewritable memory technology. The company's first commercial application for the technology will be brand protection, with a commercial product due to reach the market this quarter thanks to a contract with an undisclosed customer in March.  Field trials are expected to get underway shortly.

The Invesco cash will provide the funding for the expansion and construction of additional production facilities, which should bring annual production capacity up to 500m tags per year, according to analysts at Edison. Currently the company has the capacity to make around 100m tags via a contract with Korea's InkTec Co.

The investment bid will be put to shareholders in the firm in October.

"This level of investment by a blue-chip investor should give current and potential shareholders confidence in the strength of the business model," commented Edison's Tom Grady and Katherine Thompson in a research note.

Thinfilm chief executive Davor Sutija said earlier this year that it estimates the global market for anti-counterfeiting, brand protection and security packaging technologies is expected to reach $79bn in 2014 - up from a level of $52bn in 2009 - as industries try to stem loss of revenues to counterfeiting estimated at $600bn a year.

The company sees the greatest opportunity for its security labels in the clothing, electrical devices and consumer goods categories.

Thinfilm's labels have a similar price point to holograms - which represent a $5bn world market on their own - at around 2 cents per unit but have improved security features, he said.

The company's labels require the use of a simple, dedicated device which can read and write to the memory in the printed electronic component. The unique 'signature' is created by both digital elements and analogue elements such as variations in the thickness of the polymer used in the label, so should be hard to replicate. Thinfilm estimates that the reader could be made for as little as $2 per unit.

"Our brand protection and smart label products are expected to have an impact on broad vertical markets, such as consumer packaged goods, health care, and retail," said Sutija.

"This investment provides capital to accelerate our ambitious roadmap," he added.

- Meanwhile, Thinfilm has appointed Dr. Peter Fischer as its new chief product officer, taking the lead on the company's business development and product marketing activities. Fischer is a veteran of the printed electronics sector having previously held positions at Plastic Logic, Qimonda and Infineon Technologies.