GPS heavyweight Garmin has snapped up family-owned DeLorme, a US company that makes satellite communication handsets for the consumer market, to strengthen its “outdoor” business segment.
GPS heavyweight Garmin (NASDAQ:GRMN) has snapped up family-owned DeLorme, a US company that makes satellite communication devices for the consumer market.
Traditionally a mapmaker, DeLorme’s flagship product is now its inReach two-way satellite communication devices fitted with GPS, which enable the user to send and receive satellite text messages or an SOS in an emergency over Iridium’s global network.
The target’s CEO Michael Heffron has said inReach is responsible for half of the company’s roughly US$20m annual revenues.
DeLorme is embroiled in a long-running legal dispute with BriarTek, which alleges the technology behind inReach breaches a patent it owns.
Garmin has said it will retain the majority of DeLorme’s 92-strong workforce and keep the company’s Yarmouth, Maine-based headquarters, primarily as an R&D facility.
Financial terms of the acquisition will not be released and the transaction is expected to close within 30 to 60 days.
“We are looking forward to completing the acquisition and are excited to help leverage our expertise into enhancing their already outstanding products,” said Heffron, who took over as CEO from founder David DeLorme in 2010.
“Garmin has extensive R&D capabilities and a global distribution network that will allow us to provide this technology to customers across many markets and around the world.”
DeLorme’s legal counsel was Brann & Isaacson.
Garmin CEO Cliff Pemble (pictured) described DeLorme as “a respected brand with exciting products and technologies that are a natural fit in the Garmin portfolio”.
Garmin, which has a market capitalisation of US$6.44bn, recorded annual revenues of US$2.87bn for 2014, with 15% of that total contributed by its ‘outdoor’ business segment.
In its last quarterly results, Pemble noted that its 2015 revenues were expected to be down on the previous year.
“The global economic environment and intensified competitive landscape have challenged our ability to repeat the strong financial performance of 2014,” Pemble said on 28 October, when the Swiss-registered group revealed its Q3 results.
Garmin’s full 2015 results will be released on 17 February.