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European market leader Paragon ID announces the acquisition of Security Label

  • Author:Lucy
  • Release on:2021-06-28
Paragon ID, one of the world's largest manufacturers of air transport luggage tags, and the European market leader, officially announced the acquisition of Security Label. It is reported that this acquisition will take effect on July 1, 2021.

Customer portfolio of the world's largest airline
Security Label is a German company located near Hanover, founded in 1990 by the Von Wedekind family. After years of development, it has become a global benchmark enterprise in the field of luggage tag design and manufacturing, providing customers with a full range of check-in services, standards and RFID luggage tag products.

At present, Security Label has reached cooperative relations with more than 400 airlines and airports in more than 100 countries, and is a strategic partner of IATA (International Air Transport Association). According to market estimates, its market share in Europe, the Middle East and Africa is about 70%.

In the whole year of 2019, Security Label achieved a turnover of 12.5 million Euros. Due to the continuous spread of COVID-19 on a global scale, the demand for air traffic has dropped sharply, and its income has also fallen sharply. However, with the gradual lifting of travel restrictions, its turnover is expected to grow steadily.

Goal: Become a global leader in RFID luggage tags in the aviation industry
After the successful acquisition of Security Label, Paragon ID will be one step closer to its goal of becoming a global leader in the field of luggage tags in the aviation industry.

According to Resolution No. 753, IATA supports the use of radio frequency identification (RFID) technology to deploy baggage tracking systems worldwide. Therefore, more and more airlines have begun to transition to RFID technology, and many companies are committed to replacing their luggage tags with new tags that support RFID in the next few years.

Through this acquisition, Paragon ID can gain the reputation of Security Label and its strong business relationship with the world's largest airline, combining them with its own expertise in RFID technology to accelerate the pace of development in this field. As airlines increasingly adopt RFID tags, Paragon ID aims to become a global leader in RFID luggage tags for air transportation.

In addition, after the merger is completed, Security Label will be able to use Paragon ID's established position on the other side of the Atlantic to expand its business with North American airlines.

This acquisition also marks Paragon ID's further expansion into new areas, as well as laying the foundation for the development of other activities in the German market (real-time positioning systems, mobile and account-based ticketing, payment, etc.).

Terms of the transaction

According to the agreement signed by the two parties, Paragon ID can obtain 93% of the capital of Security Label after the merger transaction is completed, and the transaction will take effect on July 1, 2021.

The remaining 7% share is held by Montassar Ben Hmida, CEO of Security Label. He will lead the company to complete the integration with Paragon ID. Paragon ID will determine the specific acquisition price based on Security Label's performance in the next few years.

The funds for the acquisition will all come from the company's own funds and Paragon ID's existing credit line.

Clem Garvey, CEO of Paragon ID said:

"Since we won the Air France contract in 2019, we have been exploring the possibility of cooperation with Security Label. As the largest RFID tag manufacturer in Europe, we have been looking for mature participants who can occupy a leading position in the luggage tag ecosystem .Security Label is by far the best partner we can imagine.

I would like to welcome all employees of Montassar and Security Label to join the Paragon ID family. I would also like to thank the founding shareholder Oscar von Wedekind (Oscar von Wedekind), who is personally dedicated to finding a new home for Security Label, and this acquisition will provide it with an opportunity to realize its full potential. "

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