US-based M2M specialist Orbcomm has acquired Dutch transportation temperature monitoring firm Euroscan to strengthen its end-to-end solutions portfolio.
Around 90% of the US$29m deal was paid in cash, with the rest coming in equity. There is also a…
US-based M2M specialist Orbcomm has acquired Dutch transportation temperature monitoring firm Euroscan to strengthen its end-to-end solutions portfolio.
Around 90% of the US$29m deal was paid in cash, with the rest coming in equity. There is also a US$6.5m three-year earn-out period that is based on performance.
Euroscan supplies refrigerated transportation temperature recording systems, enabling customers to comply with European regulations when transporting food and pharmaceuticals.
It has 40 employees and generates around US$15m in sales and about US$4m in adjusted EBITDA.
Orbcomm, which aims to have two batches of its next generation 17-satellite LEO constellation launched by SpaceX this year, said the deal supports its long-term strategy of adding vertical expertise and technology, as well as helping to expand the reach of its existing M2M products and services.
“The acquisition of Euroscan allows Orbcomm to complement its North American leadership position in M2M solutions by adding a significant distribution channel in Europe and other key geographies where Euroscan has market share,” said Orbcomm CEO Marc Eisenberg.
In addition to Europe, Euroscan has distribution channels in the Far East, South America and South Africa.
The group has been transitioning its recording product suite to an M2M wireless solution over the past few years amid growing demand for telematics services. Currently around 5% of its roughly 200,000 recording units that are installed worldwide are wireless subscribers.
It is the latest in a series of bolt-on acquisitions that Orbcomm has made over the past year, as the group bolsters its M2M offering while counting down to its latest satellite constellation.
In a results call, the company said the first batch of its next generation system will be launched on 30 April 2014 and that it is second on SpaceX’s manifest, behind a cargo mission that was set for 16 March. However, following the call, SpaceX announced that its cargo mission would be delayed by two weeks to 30 March.
Eisenberg said it has the option of launching eight of the birds at a time, but decided to loft just six initially before another batch that is pencilled in for this November. He said this is because it is technically easier, and six is enough to fill its current gaps in coverage.
Orbcomm also outlined expectations for revenues to exceed US$100m this year, compared with US$74.2m in 2013. The group believes its EBITDA margin is also set to increase throughout the year from 20% to around 25%.
In January 2014 the company raised around US$37m in a share offering to fund future acquisitions.
Raymond James acted as sole book-running manager for that issue, with Canaccord Genuity and Craig-Hallum Capital Group acting as co-managers.
Orbcomm hired Near Earth for financial advice on its Euroscan transaction.
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