This morning, E Ink, the MIT spinoff that makes the electronic-paper display used in the most popular e-book readers, such as Amazon’s Kindle and Sony’s Reader Digital Book, announced that it will be purchased by Taiwanese display manufacturer Prime View International for $215 million.

In a press conference held at the Society of Information Display trade show in San Antonio, TX, Sriram Peruvemba, E Ink’s vice president of marketing, said that the deal will give E Ink access to both financing and manpower to speed up development of both color and flexible versions of its displays. (Technology Review first reported on E Ink’s efforts to create flexible e-paper in 2001.) E Ink will also demonstrate prototypes of its current generation of color e-paper tomorrow at the trade show. Peruvemba said that the company plans to mass-produce the color displays by the end of 2010.

Prime View International, also known as PVI, got into the e-paper game in 2005, by buying the e-paper division of Philips Electronics. Since that time, E Ink and PVI have had a strategic partnership: E Ink makes its VizPlex electronic-ink film in Massachusetts and ships it to Taiwan, where PVI joins it to the backplane components needed to control the displays. These finished displays are then sold to Amazon, Sony, and more than a dozen other e-book makers.

Peruvemba said that the deal will close in the fourth quarter of 2009. Investors including Hearst, Intel, and Motorola have put more than $150 million into E Ink in five rounds of funding. As a private company, E Ink has not released information about profitability, but since PVI is a publicly traded company, Peruvemba expects that more financial information will be available after the acquisition is finalized.

E Ink will continue its operations in Cambridge and South Hadley, MA, and all corporate officers will continue on, said Peruvemba.