Anoto, a digital writing company headquartered in Lund, Sweden, announced that it would acquire longtime partner Livescribe, another smart pen maker, for $15 million in a transaction that is expected to close this month. According to Anoto “this is an all-cash deal and is based upon an enterprise value of $15 million—equal to estimated annual sales for 2015.”
This is a bargain of sorts, but a poor return for investors
Oakland-based Livescribe, founded in 2007, had raised at least $68 million from backers like Qualcomm, Crosslink Capital and Scale Venture Partners.
To finance the acquisition, Anoto says that it has signed a placement agreement with Sweden’s Carnegie Investment Bank AB to issue 158 million shares in Anoto, for a dilution of a maximum of 15%. Anoto has also taken a short-term loan of $2.9 million (25 million Swedish crowns).
Livescribe was one of the early leaders in smart pen technology — and by default one of the early movers in the whole area of “Internet of Things” and turning “dumb” objects into connected pieces of hardware. However, the company has faced some serious hurdles, amongst them losing a trademark case in 2013 against UK pay-TV company BSkyB over the use of “Sky” for one of its WiFi-connected pen models. In turn, the Sky wifi smartpen was renamed to the more unimaginative “wifi smartpen.” By acquiring Livescribe, Anoto is widening the kinds of products it’s developing and selling.
“Acquiring Livescribe is another important step in consolidating the Anoto ecosystem and realizing synergies in hardware and software development, supply chain and operations, and sales distribution,” said Stein Revelsby, CEO of Anoto, said in a statement. “We are already working on a new range of products to be launched in Livescribe’s sales channels in 2016.”
The Swedish company has in the past worked to provide digital solutions for any kind of writing, from notes through to interactive displays and large walls. Livescribe is more about developing handheld styluses for smaller surfaces. That narrowed focus may have been a boost for developing quality, but it perhaps was also one of its problems as a company, considering the large amount competition in this space, from other startups like Paper to large tech companies like Apple designing its own “native” digital ‘pencil’.
“By joining forces with Anoto, we see huge potential for smartpen technology to expand beyond the consumer market and beyond writing and drawing on paper,” said Gilles Bouchard, CEO of Livescribe in the same statement. “We’ve had a successful licensing partnership with Anoto since Livescribe was founded and I am confident that becoming part of Anoto Group will strengthen Livescribe’s position in the consumer market and allow us to pursue many exciting new opportunities in the years to come.”
Anoto Group AB is a global leader in digital writing solutions, which enables fast and reliable transmission of handwriting into a digital format. Anoto operates worldwide through a global partner network that delivers user-friendly digital writing solutions for efficient capture, transmission, distribution and storage of data. Anoto is currently in use across multiple business segments, e.g. consumer, healthcare, banking and finance, transportation and logistics and education. The Anoto Group has over 100 employees and is headquartered inLund (Sweden).The company also has offices in Basingstoke and Wetherby (UK), Los Angeles and Boston(US) and Tokyo (Japan). Anoto is traded on the Small Cap list of Nasdaq Stockholm under the ticker ANOT.
Livescribe brings notes, words and ideas to life. Livescribe smartpens make it easy to connect paper and pen to the digital world and fundamentally change the way people capture, access and share what they write, draw and hear. Livescribe’s family of smartpens includes the Echo smartpen and the Livescribe 3 smartpen.