Prime View International, E Ink Revise Merger Agreement

Prime View International (PVI), the world’s largest supplier of ePaper display modules, announced it has amended its merger agreement with E Ink Corporation, the leader in electronic paper display materials and intellectual property.

In addition to the $215 million cash consideration unveiled on June 1, 2009, the revised agreement includes consideration for E Ink shareholders based on the combined company’s stock performance over a three-year period. The consideration will be granted in the form of 120 million convertible preferred shares that can be converted into common shares as the stock climbs from NT$50 to NT$80. At the end of the three-year period, any unconverted preferred shares will be cancelled. The transaction is expected to close in the fourth quarter of 2009.

The parties agreed on the additional consideration based on the explosive growth of the ePaper market in 2009 and rapidly improving financial performance at E Ink. E Ink revenue reached $96 million (unaudited) during the first nine months of 2009, a growth rate of 250% over the prior year and surpassing what was expected when the original deal was agreed. Additionally, economies of scale have enabled E Ink to operate profitably and the merger will now cause an immediate increase to the earnings of the combined entity.

“This is a creative win-win agreement for both PVI and E Ink,” said Scott Liu, chairman and CEO of PVI. “PVI receives a more valuable company than we expected. E Ink investors will share in the future growth of the combined company, with no additional cash cost to PVI beyond the original agreement.”

“The strategic and operational advantages of combining E Ink and PVI into a single public company are compelling and our investors want to be shareholders of PVI,” said Russ Wilcox, president and CEO of E Ink Corp. “PVI is currently E Ink’s largest customer, representing more than 50% of revenue. The combined company is well positioned to lead the global expansion of electronic paper technologies as more textbooks, newspapers, and other content migrate to this medium. E Ink’s end customers will benefit with improved supply, competitive prices, faster product development and local support across the globe.”

E Ink’s pioneering electrophoretic ink technology is used in electronic book readers, such as the Amazon Kindle and the SONY Reader, as well as in cell phones, signage, smartcards, memory devices, and battery indicators. The market for electronic book devices is among the fastest-growing segments of the consumer electronic industry. Research firm iSuppli forecasts that the fledgling market will grow from 1.1 million units in 2008 to over 18 million units in 2012.