E Ink to be acquired by Taiwanese e-paper supplier for $215 million

E-Ink (Cambridge, MA), a company that Laser Focus World has been following for more than ten years, and which produces the electrophoretic display for Amazon's Kindle e-book reader and the newly introduced and larger Kindle 2, is now under agreement to be acquired for $215 million by Prime View International (PVI; Taipei, Taiwan), a high-volume supplier of e-paper display modules.

The e-paper display module market will grow to more than $3 billion by 2013, says Jennifer Colegrove, DisplaySearch's director of display technologies (DisplaySearch is a well-known display market research firm located in Austin, TX). Electrophoretic display technology has more than 90% share in the e-paper display market, and E Ink is the #1 supplier of electrophoretic materials, Colegrove adds.

"The market for electronic book devices such as the SONY Reader and Amazon Kindle is forecasted to grow from 1.1 million units in 2008 to 20 million units in 2012, a cumulative annual growth rate of 105% over the four-year period," said iSuppli analyst Vinita Jakhanwal, "PVI and E Ink enabled this market back in 2005 and they have been the display market leaders ever since." (iSuppli, located in El Segundo, CA and also well-known, is a general technology researcher.)

"Combining E Ink and PVI creates a single public company that is dedicated to electronic paper," said Russ Wilcox, cofounder, president, and CEO of E Ink.

Multistable effect

The E-Ink display layer contains oppositely charged white and black particles. The particles are trapped in a transparent fluid within a microscopic capsule. Depending on which submicron particles are closest to the surface, light is scattered back (white state) or absorbed (black state). Because the electrophoretic effect is multistable, no power is required to maintain an image--and thus the ability for the Amazon Kindle to operate for weeks without a recharge.

E Ink and PVI currently support nearly 20 e-book manufacturers worldwide. In addition to electronic books, E Ink's Vizplex imaging film is used in cell phones, signs, smart cards, memory devices, and battery indicators. E Ink sales were $18 million in the first quarter of 2009, up 157% over the same quarter in 2008.

PVI will finance the acquisition with an equity placement and a convertible bond offering led by Taiwanese securities firm KGI. The transaction is subject to shareholder and customary regulatory approval and is expected to close in the fourth quarter of 2009.

E Ink Corporation will remain headquartered in Cambridge. and plans to expand its employee base from 127 to 150 people during 2009.

A long time ago

A tour by the Laser Focus World staff of the E Ink facility back in 2001 revealed perhaps a dozen of E-Ink's prototype electrophoretic displays "scattered throughout the building, some hand-shaped and colored by employees to advertise E Ink company events. As each sign flickered, it unavoidably drew the visitor's eye to it. After a second or two, however, it was the message itself that held the viewer's attention. Placed in a supermarket or department store, such signs would have the same attention-grabbing effect, requiring only the deft touch of a commercial artist to create a new and potent advertising tool."