Firm Specializing in Radio Frequency Identification Products Will Stay in Knox
Posted on: Wednesday, 1 March 2006, 00:00 CST
By Larisa Brass, The Knoxville News-Sentinel, Tenn.
Feb. 28--TradeWind Technologies -- 13 months after its founding in Knoxville -- is being bought by one of its customers, a Canadian firm that also specializes in radio frequency identification products.
The acquisition, for $1.7 million in cash and stock, is expected to close April 3.
TradeWind Technologies develops and manufactures flexible, low-cost radio frequency identification, or RFID, systems used and tested by customers that include Nike, Microsoft, Paxar, British Telecom and Samsung. The company has eight employees.
In January 2005, TradeWind was spun off from Knoxville-based research and development shop Morton Farms, founded by local entrepreneur Vig Sherrill.
Sherrill sold the specialty chip design company ASIC International to electronics giant Flextronics in 2001.
TradeWind in recent months has developed low-cost, flexible and portable RFID technology aimed at applications like remote payment, pharmaceutical tracking and product authentication.
Most of TradeWind's current customers are testing the company's products for possible future use, said founder, president and majority owner Doug Yeager.
Last fall the company began seeking outside investment to fund manufacturing, marketing and sales efforts. The acquisition by Sirit, Yeager said, will open doors for the company to mass produce, market and sell its technology, which up until now has strictly been online and through trade shows.
"As TradeWind developed the product we had to do one of two things," Yeager said during a conference call from Dallas, where both companies were participating in a trade show. "That is find a partner like Sirit or raise the money and try to do it ourselves."
Sirit was attracted to TradeWind's engineering staff and its technologies, which complement Toronto-based Sirit's current product offerings, said Chris Leong, Sirit vice president of strategy and corporate development.
The technology that can transform a handheld computer or, potentially, a cell phone into an RFID reader, is "ideally suited for a number of high-growth industries," Leong said, including those that Sirit is targeting.
Sirit's RFID technology is used for vehicle identification throughout California's toll-way system and in Colorado. The company also supplies RFID readers used in Mastercard PayPass technology used at ExxonMobil gas stations. The vehicle identification business makes up about 75 percent of Sirit's revenues, while remaining RFID applications make up about 25 percent.
The latter category "will be the area that will have huge expectations of growth of the market," said Sirit CFO Anastasia Chodarcewicz.
Sirit executives said the company is committed to keeping TradeWind Technologies in Knoxville, at least for now.
Within the next 30 to 45 days the company will move from its current headquarters at Fairview Technology Center in Solway to new offices in an as-yet-to-be-determined location in West Knoxville, Yeager said. He said he expects to add two to three new employees immediately as a result of the acquisition.
TradeWind's future is "all going to be driven by what happens in the market," Leong said. "(Yeager has) been the visionary; he's the guy that we've been banking on. It's one of those things that's all going to be dependent on market need and discussions with individuals and so forth."
Sirit is a publicly traded company on the Toronto Stock Exchange under the ticker symbol SI.TO and over the counter under the ticker SRTTF.PK. Shares rose 2 cents Monday, closing at 34 cents per share.
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Source: The Knoxville News-Sentinel
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