Jun. 18, 2015, 6:01 PM
- Two weeks after disclosing buyout talks with the company, Novatel (NASDAQ:MIFI) announces it's buying South African fleet-management and vehicle-tracking hardware/software firm Digicore Holdings for $87M in cash. It adds "irrevocable undertakings have been signed by holders of 58% of DigiCore's outstanding shares to vote in favor of the transaction."
- Novatel claims pairing its M2M hardware with Digicore's Ctrack cloud/SaaS telematics software offerings (~325K subscribers) and recently-acquired Feeney Wireless' services will yield "the market's first full-stack solution for the global transportation industry." The company also argues Digicore will expand its overseas reach.
- ~980 Digicore employees are expected to join Novatel. The deal is expected to close in Q4.
- MIFI +1.1% AH to $3.75. Ahead of the deal, Novatel launched a $120M convertible offering to pay for it, and potentially also other acquisitions.
Jun. 5, 2015, 9:52 AM
- Novatel (MIFI +0.2%) is selling $120M worth of convertible senior notes due 2020. The notes sport an interest rate of 5.5%, and a conversion price of $5.00 (27% above current levels).
- Proceeds are expected to be used for M&A. Novatel says it's "engaged in negotiations with respect to several contemplated acquisitions." Among them: An $80M purchase of South Africa's DigiCore Holdings, a provider of fleet management/vehicle-tracking hardware and software (complements Novatel's existing telematics offerings).
- Novatel asserts buying DigiCore "would establish the Company's position as a lead player in the global asset tracking and management market, and would provide immediate top-line contribution and meaningful EBITDA contribution in 2016." It's two months removed from announcing a deal to buy M2M/IoT hardware, software, and service provider Feeney Wireless for $25M-$50M.
- The company had $9.4M in cash at the end of Q1, and $7.2M in credit facility debt.
Mar. 30, 2015, 1:22 PM
- Novatel (MIFI +3%) has acquired Feeney Wireless, a provider of hardware, software, and services for M2M/IoT systems and networks, for $25M in cash and stock + up to $25M in earn-outs to be paid over 4 years.
- With Feeney expected to generate 2015 revenue of $38M, Novatel is paying less than 0.7x forward sales; the company's 2015 non-GAAP EBITDA is expected to total $3M. Its hardware includes M2M/IoT modems, in-vehicle gateways, and power components; its software includes an M2M app framework and device management software; its services cover hardware design, systems integration, and remote monitoring.
- Novatel, which already offers M2M modems and tracking/management software, asserts the deal allows it to be "a total IoT solutions and services leader, from hardware to SaaS to connectivity." It follows Sierra Wireless' purchase of M2M service provider Wireless Maingate, and Amazon's purchase of IoT cloud service provider 2lemetry.
- To help finance the deal, top shareholder HC2 Holdings has exercised $8.6M worth of Novatel warrants (issued last September) ahead of plan.
Dec. 22, 2014, 10:33 AM
- Sierra Wireless (NASDAQ:SWIR) is acquiring Wireless Maingate, a Swedish provider of M2M connectivity and messaging services for 500+ European clients, for $90M in cash. The deal is expected to close in February.
- With Maingate forecasting 2014 revenue of over $19M (to go with EBITDA of $6M), Sierra is paying less than 5x sales. The purchase is expected to be immediately accretive to earnings.
- Maingate's services connect over 500K M2M devices, and are paired with a service management platform for handling customer interactions. The company also has a data management business (focused on energy services) that will be retained by current shareholders.
- Sierra, already a major provider of M2M hardware, plans to use Maingate to offer European firms "complete device-to-cloud solutions, with fully integrated hardware, embedded software development tools, cloud-based application development, device and subscription management, and wireless services."
- M2M rival Novatel (MIFI +3.1%) is also higher today.
Jun. 18, 2012, 9:48 AM
Sierra Wireless (SWIR -1%) is acquiring the 2G/3G machine-to-machine (M2M) wireless module business of France's Sagemcom for £44.9M ($70.3M) in cash + assumed liabilities. The acquisition bolsters Sierra's existing M2M ops, putting it on better footing to compete with Novatel (NVTL) and others. It also lowers Sierra's dependence on a fiercely competitive, low-margin, 3G/4G modem business.| Jun. 18, 2012, 9:48 AM