Ambient Corp., a developer of smart card technology, said it reached an agreement in principle to merge with Ordacard Hi-Tec Industries Ltd., Israel's largest plastic card manufacturer.

The merged company, to be known as Ambient, would set its sights on rapid international expansion, the principals said.

"Our ability to offer customers complete smart card solutions, from chip through system rollout, will put the company in a leadership role within the industry," said Eli Garber, president of Ordacard, who would be president of the post-merger Ambient.

Jacob Davidson, chief executive officer of Ambient, a U.S. company with a research and development center in Jerusalem, would become chairman of the board. The company's chief technology officer, Yehuda Cern, was former R&D manager of News DataCom, which developed the smart card systems for the Sky (UK) and DirecTV satellite broadcasting networks.

Ordacard, based in Caesarea, Israel, has the capacity to produce 60 million cards a year, including 10 million chip cards. It was 25% owned by American Banknote Corp., New York, which is exchanging those shares for 12.5% of Ambient.

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