Ken Traub and American Bank Note Holographic

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Brief Description of Company, Industry, and Competitive Environment: American Bank Note Corporation (ABN) was founded in 1795 as a business that created official bank notes, stamps, checks, and other documents for the U.S. government, state governments, foreign governments, and businesses. ABN was the original printer of U.S. currency and was the largest printer of currency and secure documents in the world for many years. Eventually, the government began to print their own currency and did not need private printers anymore. Soon ABN began to create additional products such as: stock certificates, government documents, and American Express travelers’ checks. ABN used an independent auditor to keep its books. ABN completed more than two dozen acquisitions which expanded its business scale and scope. American Bank Note Holographic (ABNH) spun off of ABN and went public in 1998. Upon doing so, ABNH sold 13.6 million shares and retained no shares for itself, raising $107 million after paying the banks that ran the offering. It had no cash and inherited an obligation to repay bank debt that was taken out when ABNH was a subsidiary of ABN. ABNH made the holographic labels on credit cards and other products that served as a security device and sign of authenticity. ABNH was the first to use the technology to create a holographic image for Mastercard in 1983. ABNH also produced security holograms for ID cards, documents of value (currency and stamps in several foreign countries), tamper resistance, and authentication of goods. Holograms made up about 95% of ABNH’s sales; ABNH controlled 8% of the total security hologram market. They owned several patents that covered their security features and production processes. ABNH was vertically integrated while other companies in the industry tended to focus on one or more segments of the value chain and used cross-licensing or

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