Kindle display creators to merge

Two companies that teamed up to create displays for the Sony Reader and Amazon.com Kindle e-book readers are officially joining forces.

Taiwain-based Prime View International (PVI), a leading display maker, said Monday it plans to acquire e-paper manufacturer E Ink for $215 million.

PVI creates displays for digital devices, including cameras, TVs, GPS systems, and e-readers. The company has its own e-paper unit and is a top worldwide supplier of flexible display panels. Cambridge, Mass.-based E Ink makes digital ink technology that goes into cell phones, e-readers, and other portable devices.

PVI and E Ink have already had a relationship. PVI has been one of E Ink's biggest customers, having switched from LCDs to electronic ink for its display panels. Electronic ink offers higher resolution and chews up less power than traditional LCD panels. The two worked together to create the displays for Amazon's Kindle and Sony's Reader.

The combined company hopes to capitalize on the growing e-reader market.

"Combining E Ink and PVI creates a single public company that is dedicated to electronic paper," said Russ Wilcox, E Ink's co-founder, president, and CEO. "With a common ownership structure, we can get closer to customers around the world, streamline the supply chain, and speed up new product development."

The surging demand for e-paper is likely to continue. A recent report from Forrester Research predicts a boom in e-readers in the U.S. over the next few years. A report from market researcher In-Stat predicts that worldwide e-reader shipments will jump to 30 million by 2013.

Since its inception in 1997, E Ink has depended on cash infusions from other companies to stay afloat and keep growing, including from Intel, Motorola, and Philips. Over the years, E Ink has received $150 million in financing, with its investors waiting for the e-book market to pay off.

With its acquisition by PVI, E Ink may finally have the resources to take bigger strides. Referring to PCI, Wilcox said, "They've been at it for years, they feel the growth, and they've decided to focus their company on electronic paper. With their resources, we're going to be able to accelerate our research and development and expand capacity more quickly."

The acquisition is subject to approval by shareholders of both companies. Under the plan, E Ink will become a wholly owned subsidiary of PVI, keep its headquarters and staff in Cambridge, and expand its research and development on e-paper. E Ink also plans to add another 20 workers to its 120-member staff.