Sunday, June 22, 2008

Is NeoMedia Technologies For Sale?

NeoMedia Technologies, the global leader in camera-initiated barcode transactions for mobile devices, released an 8-K SEC filing last Monday which alluded to the potential sale of the company.

The filing states that during the next 18 months NeoMedia's CEO Iain McCready can earn a commission of up to 2.5% of sales proceeds for selling the company if the sale price is not less than $45M, with a commission cap set at a $200M sale price.

However, that's not to say that Iain can't sell NeoMedia for more than $200M. He can. Especially with a favorable patent review by the USPTO anticipated later this year.

NeoMedia Technologies has a suite of twelve issued patents covering the core concepts behind linking the physical world to the electronic world dating back to 1995. These patents cover various linkage methods including: Barcodes, RFID, Mag Stripe, Voice, and Other machine readable and keyed entry identifiers.

These patents were first licensed by Digital Convergence for $100M in 2000 to facilitate the launch of the :CueCat.

In 2001, NeoMedia Technologies formed a strategic alliance with Symbol, now owned by Motorola, and
signed a worldwide agreement which gave Symbol the right to grant licenses to itself and third parties under NeoMedia's intellectual property. Symbol would later offer to buy NeoMedia's valuable patent portfolio in 2002 for $150M. The offer was declined however in favor of further developing the IP and growing the patent portfolio as a core component of NeoMedia's long-term growth and market strategy.

In 2005, Virgin Entertainment and NeoMedia Technologies entered into an extended licensing agreement, which saw Virgin license NeoMedia's patents through 2016.

There were even strong rumors that Microsoft was interested in purchasing NeoMedia back in 2005.

Flash forward to today
, mobile barcode reading is an everyday part of the popular culture in Japan and Korea. The technology is just now beginning to emerge in Europe with North America not too far behind. With so many companies entering the mobile code reading space, and looking to carve out their niche, NeoMedia has positioned itself well with it's extensive patent portfolio and barcode technology, and will bring tremendous value to anyone interested in acquiring the company.

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