On June 17th, 2021 Brady Corporation, a global leader in safety, identification, and compliance solutions announced that it has acquired The Code Corporation for $173 Million. The move is latest in a series of strategic acquisitions following Brady’s May 2021 deals to acquire Magicard, a U.K.-based company that manufactures a range of specialized high-resolution identification card printers, and Nordic ID, a Finnish company that offers a complete collection of RFID readers, scanners, and associated software platforms. Combined, these three acquisitions will cost Brady a total of $245 million, funded with cash on hand as well as with borrowings on their existing lines of credit.
Brady sees these acquisitions as key to filling the existing gaps in their solutions set, and critical to achieving their long-term goal of building a complete Industrial/Manufacturing track and trace solution that combines their historic brand portfolio and expertise in mobile, benchtop, and automaton, with Code and Nordic ID’s core competencies in RFID, barcode readers, and complementary software. Currently using off the shelf RFID and barcode readers, Brady expects combined resources and cost synergies to provide added value along each stage of the supply chain, resulting in fully integrated products that will provide Brady with new competitive advantages in their fast growing target markets.
Driven by the continued adaption of Industry 4.0, the industrial track and trade market is growing rapidly as emerging use cases increase demands for improved workflow and visibility. Buying Code and Nordic ID allows Brady to begin offering Code’s durable high-performance barcode scanners, and Nordic ID’s RFID scanners as part of their growing portfolio of products in the short term, while investing R&D resources to help accelerate new product launches including the next generation of identification tools capable of scanning both, barcodes and RFID, and printing in high quality.
While Code currently sells its handheld scanners primarily in the healthcare industry, they have a growing position in industrial applications. New Code models boast improved specs, greater durability, readiness for disinfectants, long lasting batteries, and improved reading performance, making Brady’s position in track and trade much stronger.
Brady sees the industrial track and trade as one of the fastest growing use cases for their printers, consumables, software, and now and RFID scanners, and barcode readers. Brady believes that the strategic acquisitions will provide them with a foothold in the niche market of industrial plant automation, answering market pressures that increasingly demand the digitalization of everything, the ability to track products through each stage the manufacturing cycle, and drive efficiency of the manufacturing and fulfillment processes.
The Code acquisition will help aid Brady’s transformation from a discrete product identification provider to a track and trade solutions provider. While necessary to establish an ecosystem promoting use and interoperability of Code, Nordic ID, and Brady existing products, Brady plans to invest the necessary R&D resources to create a software umbrella around their new diversified product mix.
While Brady in the past has grown revenue at rates consistent with GDP, with a long track record of strong growth, and proven profitability, in Code, Brady expects not necessarily expedited organic growth, but the opportunity raise growth rates over a period of time, consistently outperforming GDP. In addition to the incorporation of additional products into Brady’s new brand portfolio, existing distributor relationships across multiple geographies will provide access to untapped markets for all four integrated companies, increasing growth opportunities, and providing the industrial and manufacturing industry the range of versatile identification products they increasingly demand.