VeriChip Corp. has completed the sale of its Kanata operations to U.S. tool maker The Stanley Works.

The Delray Beach, Fla.-based maker of radio frequency identification systems for the health-care industry said it has wrapped up the $47.9-million sale of its wholly owned Canadian subsidiary, Xmark Corp., to Stanley Canada Corp., the Canadian arm of the Connecticut-based tool maker.

The payment consists of a $45-million purchase price plus a balance sheet adjustment of $2.9 million, the company said.

"We believe the transaction, which provided an excellent valuation for Xmark, was in the best interest of our stockholders," said departing VeriChip chairman and CEO Scott Silverman in a statement. "It will enable us to pay off all of our outstanding debt and issue a special cash dividend to our stockholders."

Joseph J. Grillo, president and CEO of Digital Angel Corp. which owns 48 per cent of VeriChip, has replaced Mr. Silverman as chairman of the company.

VeriChip noted that the deal, which was announced in May, does not include the transfer of its VeriMed Health Link business, which makes implantable health identification chips, but confirmed that it is looking out for potential buyers for the division.

As a result of the Xmark sale, VeriChip said it expects to see net proceeds of $24.8 million after paying off its debts.

The company said it will pay a special dividend of at least $15 million to stockholders as part of the deal.