SICPA Security Inks and Systems USA, Inc., a leading provider of integrated government security solutions on high excise tax products, announced that it has acquired Meyercord Revenue Inc., previously a wholly-owned subsidiary of Illinois Tool Works Inc. The transaction will combine SICPA’s international government tax platform expertise with Meyercord’s experience in producing and distributing tobacco tax stamps for U.S. states and municipalities. The transaction closed on Sept. 2 Financial terms were not disclosed. ITW has retained a related business that manufactures and services tax stamp application equipment.
“The combination of SICPA and Meyercord technology has already proven itself in California, where our companies work together to produce high-tech, paper-based cigarette tax stamps that help prevent counterfeiting and recover lost revenue on untaxed product,” Charles Finkel, SICPA’s executive vice president said. “And we have recently signed a similar contract in Massachusetts and implementation is currently in progress. Our goal is to make this technology as widely available and easily implemented throughout the U.S., as well as to enhance existing state and federal tobacco tax collection systems.”
According to 2009 statistics from the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. loses $5 billion per year in state taxes due to counterfeit tobacco – a figure which some sources view as conservative. California, which in 2005 implemented a program to enhance its cigarette-tax enforcement practices, including use of high-tech stamp technology, estimates the state has already recovered more than $150 million in additional tax revenue each year since the program began.
Meyercord currently provides 250 different tax stamps to 47 states, approximately 140 municipalities and Native American tribes. As a part of the acquisition of Meyercord, SICPA plans to retain the current employment level at Meyercord’s facility in Carol Stream, IL, near Chicago.
“We are committed to Meyercord, its management and employee base,” said Jim Bonhivert, president and CEO of SICPA North America. “We plan to profitably grow the current operation and its reach while moving forward with technology that contributes to the public good.”