M2M specialist satellite operator Orbcomm has signed a definitive agreement to acquire the assets of PAR Logistics Management Systems for up to US$10m in a cash and stock deal.
Under the terms of the transaction, Orbcomm will pay an initial cash…
M2M specialist satellite operator Orbcomm has signed a definitive agreement to acquire the assets of PAR Logistics Management Systems for up to US$10m in a cash and stock deal.
Under the terms of the transaction, Orbcomm will pay an initial cash consideration of US$4m and provide PAR Technology, the parent company of PAR LMS, with approximately 258,065 shares, worth US$800,000. A further 387,097 shares of Orbcomm stock, worth US$1.2m, are to be held in escrow by Bank of New York Mellon and will be made available to pay certain indemnification obligations.
In addition, there is a contingent consideration of just under US$4m payable in cash, Orbcomm stock or a combination, at Orbcomm’s option. Up to US$3m of this is payable based on PAR LMS helping Orbcomm achieve certain new subscriber targets in 2012 and then a further US$950,000 on meeting specific sales targets between 2012 and 2014.
Raymond James advised Orbcomm on the transaction, while Needham & Company acted as financial adviser to PAR Technology.
Formed as a joint venture between PAR Technology and the US Department of Transportation, PAR LMS provides advanced solutions for monitoring transport assets and cargo in the transportation and distribution industries. The sale follows a strategic review by management over the parent company’s long-term growth prospects, with Paul Domorski, PAR chairman and CEO commenting: “The decision to sell PAR LMS resulted from our board’s evaluation over the past year of various strategic alternatives to position the company for long-term growth. Focusing on the core businesses will benefit customers and shareholders and the sale of PAR LMS is an important step forward to unlocking the intrinsic value of PAR’s underlying assets.”
For its part, Orbcomm stated that the acquisition, which is expected to close in mid-January 2012, would give it access to new vertical markets as well as an enlarged customer base. The company added that it would be earnings accretive by the end of 2012 and would deliver synergies in service delivery, device manufacturing, and other operating costs.
The deal was Orbcomm’s second bolt-on acquisition of the year following its purchase of StarTrak Systems for approximately US$18.5m in May 2011. As with PAR LMS, StarTrak is focused on providing M2M solutions in the transportation sector.
SpaceX revises Orbcomm’s next gen launch schedule
Orbcomm is currently gearing up for the launch of its OG2 second generation LEO system. The 18 satellite constellation is being launched by SpaceX, which recently announced an adjustment to the launch schedule for the satellites.
The first OG2 prototype satellite is now being launched as part of the first Cargo Re-supply Services (CRS) mission in mid-2012, having previously been slated to be a secondary payload on the upcoming Commercial Orbital Transportation Services (COTS) demo in February.
SpaceX then expects to complete an additional launch of two OG2 satellites as a secondary payload on its Falcon 9 rocket in late 2012.
Between eight and twelve OG2 satellites are then slated to be launched on a Falcon 9 in early 2013, with the remainder to be launched in 2014.
