Article

Planar Systems acquisition of AllBrite Tech complete

With its acquisition of AllBrite Technologies Inc. complete, Planar Systems Inc. is expanding its reach in the international kiosk and ATM markets. The $24.9 million stock swap should result in expanded distribution of AllBrite products both in the United States and abroad.

April 10, 2004 by

With its acquisition of AllBrite Technologies Inc. complete, Planar Systems Inc. is expanding its reach in the international kiosk and ATM markets. The $24.9 million stock swap should result in expanded distribution of AllBrite products both in the United States and abroad.

Among the new products set for launch in 2001 is a POS solution for gas pumps, AllBrite President Lee Olesen said. "We had a product for that market, they have a good distribution channel in that industry," he said.

Planar, a publicly-traded company based in Beaverton, Ore., completed the acquisition of the privately-held AllBrite on Dec. 22, 2000.

Planar develops and markets high performance information display systems. The company produces products for the industrial, medical and transportation markets, and supplies more than 1,000 customers worldwide.

AllBrite is a supplier of full color, flat panel displays to the ATM and outdoor kiosk markets, including ticketing kiosks in subways in San Francisco, New York and Singapore.

AllBrite will lose its corporate name, but keep its existing headquarters in San Diego. The company's 30 employees will be added to Planar's workforce of 850.AllBrite will continue to be used as a trademarked product name, though the new business partners have yet to determine in what capacity.

Olesen's role in the company will switch from AllBrite president to marketing and site director at the San Diego plant. He will also lead the company's business development efforts.

"They have a strong market share in both (kiosks and ATMs). Diebold is their largest customer in the ATM market. So for us, the acquisition brought a couple of markets where they have a real strong, rapidly growing product portfolio," said Steven Buhaly, Planar vice president and CFO.

Planar expects AllBrite to produce revenue of $10 million in the fiscal year ending October 2001. Planar projects earnings of $195 million in the same period.

"Our earnings per share are better with them than without them," Buhaly said.

The companies are hammering out a business plan that will chart their growth as a team, Olesen said. The partnership, he added, is starting on solid ground.

"It was a great merger. They have an infrastructure that's pretty set up for good growth. We have a great product base in our market," Olesen said. "We have some real blue-chip customers. The growth that we were seeing was going to be extremely difficult for us without an infrastructure like Planar's. We both got what we wanted."

AllBrite has strong products, but its modest size and limited finances have prohibited its growth, explained Bill Sproull, vice president and general manager of industrial business for Planar. With Planar's financial backing, AllBrite products will reach new corners of the ATM and kiosk markets, Sproull said.

What AllBrite lacked in financial power, it made up for with "a very focused and customer-intimate approach" to creating kiosk and outdoor display solutions, Sproull said. It was a business approach good enough to attract Planar's attention.

"Many of those markets demand a very customized solution. They did a very good job of doing that in the ATM and ticketing kiosk markets," Sproull said. "I would hope that we will learn from that and implement that a little broader into the markets that Planar has been in traditionally."

Planar will stay focused on outdoor products because "that's where our strength has been in the past," Sproull said. "There are still good growth opportunities there."

Most of the company's concentration is on North America and Europe, but Planar intends to expand "incrementally into other parts of the broad kiosk marketplace," Sproull said.

By approaching this challenge from the role of a systems solution provider rather than a focus on product, Planar expects to realize this goal. The company has high-volume assembly partners in the Far East, a part of the globe where the potential kiosk and ATM market equals North America, Sproull said.

"Obviously, we're looking for what segments of the kiosk marketplace are growing faster than others and what parts need custom display solutions," Sproull said.

A CRT screen is much like the one found in a TV or desktop PC, Sproull said. They are fairly large, deep and draw a considerable amount of power.

The flat panel display screen is beginning to replace the CRT screen in some ATM and kiosk applications because it uses less power, requires less space and lasts longer than CRT screens, Sproull said. He believes the ATM industry will convert "very rapidly" in the next few years from CRT to flat panel displays.

Because AllBrite is doing business with heavy hitters like Diebold, "I would expect to participate in that conversion at Diebold and at other ATM manufacturers," Sproull said.

Planar has made moves in providing flat panel monitors for medical and consumer desktop applications. Somewhere between the medical industry - where products such as patient monitors and anesthesia displays undergo strict certification guidelines - and computer desktop monitors, markets that Planar has explored prior to the acquisition, there may be an opportunity for Planar to excel in providing monitors for industrial applications, Sproull said.