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Posted: April 22, 2008
The Carlyle Group, Partnering with J.H. Whitney, Leads Acquisition of Authentix, Inc.
(Nanowerk News) Global private equity firm The Carlyle Group today announced that, along with private equity firm J.H. Whitney & Co., a group of existing investors that include Manti Resources, Inc., and Authentix’ existing management team, it has acquired Authentix, Inc., a company that develops and delivers an array of authentication and brand protection solutions in the banknote, consumer, medical device, oil and gas and pharmaceutical industries, as well as excise tax recovery solutions for national and state governments. The transaction closed on April 18, 2008. Financial terms were not disclosed.
A pioneer in the rapidly growing authentication industry, Authentix develops nanoscale-engineered markers, opto-electronic and nanophotonic detection devices and software that help its clients ensure the authenticity, integrity and safety of their products. Over the past five years, Authentix has recovered more than $5 billion in lost revenues for its clients, which include Fortune 500 companies and national governments. Authentix currently provides authentication services in 18 countries on five continents.
“Focused on industries that are most susceptible to losses from the counterfeiting of their products, Authentix will continue to capitalize on the authentication market, which is projected to triple by 2011,” said Steve Bailey, Managing Director, The Carlyle Group. “We are excited to work with Authentix’ seasoned management team and talented employee base and to continue to invest in research and development at a rate commensurate to the growing concern about the rise of counterfeiting, smuggling and grey market diversion.”
“This transaction will enable Authentix to tap into Carlyle’s global network and expertise and significantly strengthen our international business development activities,” said David Moxam, Chairman and CEO, Authentix. “Additionally, we are excited to extend our capital base and accelerate our acquisition strategy to better serve our existing and future clients across all industries. As the dynamics of global counterfeiting continue to evolve, this investment affirms our commitment to the use of advanced and innovative nanotechnology, device and software platforms for brand integrity and excise tax collection programs.”
“Authentix’ unique portfolio of technologies and its solutions-based approach has ensured the company is a trusted partner to corporations and governments around the world,” said Carlyle Senior Advisor, Charles Rossotti, who from 1997 to 2002 served as Commissioner of Internal Revenue Service. “In particular, Authentix’ Excise Tax Recovery Programs provide government authorities with the ability to effectively authenticate and track goods to ensure tax revenues are optimized rather than lost altogether, a major problem, for example, in tobacco and oil and gas industries. I look forward to working with the Authentix team to further expand the company’s global client base.”
MHT Securities, a wholly owned subsidiary of MHT Partners, which focuses on merger and acquisition advisory for tech-enabled growth companies, was the exclusive advisor to Authentix in this transaction.
Authentix’ solutions are built upon three key components: authentication, recognition and data management. Depending on a particular client’s needs, products are marked with authenticating forensic features that range from nanoscale markers embedded in packaging materials to molecular markers that can be incorporated into the product itself (ranging from fuels to pharmaceuticals). Authentix develops a wide range of opto-electronic devices that are used to test for these proprietary markers. These devices recognize the in-product and on-package markers determining if the product is authentic, counterfeit or diluted. Data retrieved from product sampling via Authentix’ opto-electronic devices can be aggregated and used to create real-time reports for clients. This authentication and tracking data, for example, highlights geographical problem domains, identifies compromises in supply chain integrity, etc. This valuable information and analyses enable clients to take appropriate remedial action.
About The Carlyle Group
The Carlyle Group is a global private equity firm with $81.1 billion under management committed to 60 funds. Carlyle invests in buyouts, venture & growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. Since 1987, the firm has invested $43.0 billion of equity in 774 transactions for a total purchase price of $229.3 billion. The Carlyle Group employs more than 1,009 people in 21 countries. In the aggregate, Carlyle portfolio companies have more than $87 billion in revenue and employ more than 286,000 people around the world. www.carlyle.com
About J.H. Whitney & Co.
J.H. Whitney & Co., established in 1946, was one of the first U.S. private equity firms pioneering the development of the private equity industry. Today, J.H. Whitney remains privately owned and its main activity is to provide private equity capital for small and middle market companies. J.H. Whitney is currently investing its sixth private equity fund, J.H. Whitney VI, L.P., for major endowments, foundations, pension plans, and high net-worth families. Investment activities are focused on small and middle market buyouts of market leading companies that are poised for growth in a number of industries including consumer products and retail, healthcare services, specialty manufacturing and business services.
Manti is a privately held energy company that invests primarily in the energy sector through its subsidiaries Manti Exploration (Oil and Gas Exploration and Production), Magnus Energy Marketing (Gas Wholesale Trading). Manti is also active in the high technology sector with controlling interests in Cimex Medical Innovations (Biomedical Devices), and ImmunoBiosciences (Vaccine Technology).
Headquartered in Corpus Christi, Texas, Manti has subsidiary offices located throughout the U.S. including Houston, TX, Dallas, TX, Lafayette, LA, New Orleans, LA, Denver, CO and Tulsa, OK. The key to Manti's success has been actualizing high yield, high risk opportunities by hiring the best and allowing them to participate in the value they create. Another core value is supporting community initiatives which inspire and support disadvantaged groups through its nonprofit affiliate company, FutureUS.
As the global leader in authentication solutions for brand protection and excise tax recovery, Authentix® is on the frontlines of the battle against counterfeiting and smuggling. Authentix offers a wide array of world-class solutions that are based on innovative nano-scale engineering and mass serialization so that brand integrity can be preserved as products move through the supply chain. Authentix’ solutions safeguard consumers from harmful products and prevent profits and tax revenues from being lost to illegal activities, such as terrorism. With clients including Fortune 500 companies and national governments, Authentix has recovered over $5 billion in lost revenues in the oil and gas, pharmaceutical and medical device, tobacco, spirits, and consumer goods industries. In addition, our expertise in the fields of value documents, currency and homeland security applications helps protect the very fabric of our society. www.authentix.com