I have just received a press release from Checkpoint Systems and OATSystems which announced that the former had entered into "a definitive Agreement" to acquire the latter. The all cash transaction is expected to close within two weeks. Checkpoint expects the transaction to be dilutive to earnings per share through 2009 and accretive thereafter.

Checkpoint Systems are a provider of identification, tracking, security and merchandising solutions for the retail industry and its supply chain. Checkpoint has more than one million RF devices installed in stores today and has secured more than 100 billion products. OATSystems are a leader in the RFID middleware and application software arena and one of the original start-ups working on RFID middleware. Checkpoint and OATSystems offer complementary merchandise protection and inventory management applications that together strengthen their combined presence in the retail market.

Rob van der Merwe, President and Chief Executive Officer, Checkpoint Systems, Inc, said "With this acquisition, Checkpoint is once again redefining the scope of Shrink Management. The addition of OATSystems builds upon our previously announced strategy to help retailers and their suppliers migrate more easily with our Evolve Electronic Article Surveillance platform to Electronic Product Code RFID. As our industry moves to a common EPC standard, Checkpoint with the addition of OATSystems' capabilities will now be able to offer solutions that enable retailers and their supply chains to gain deeper inventory visibility—further reducing shrink and increasing bottom-line profits by enhancing on-shelf merchandise availability for consumers."

Senior management of OATSystems, including Michael George, President and Chief Executive Officer of OATSystems, will continue to operate the business as a division of Checkpoint. The Company will continue to use and develop the OATSystems brand and software platform to serve retail, consumer products and industrial customers.

So one more of the start-ups in RFID middleware has been acquired. The acquisition makes sense for both parties, who already have a number of joint customers. It will be interesting to see how the joint product set will eventually be partitioned between the OATSystems division and the main Checkpoint Systems company.