MSS operator Orbcomm has finally sold its hardware subsidiary Stellar Satellite Communications to Quake Global, a US-based manufacturer of M2M based satellite and terrestrial communicators.
Quake paid a nominal purchase price of approximately US$48,000…
MSS operator Orbcomm has finally sold its hardware subsidiary Stellar Satellite Communications to Quake Global, a US-based manufacturer of M2M based satellite and terrestrial communicators.
Quake paid a nominal purchase price of approximately US$48,000 for the assets, although Orbcomm will receive royalty payments on future product sales from Stellar’s existing inventory over the next three years, and from products currently in development over the next four years. Quake will also assume all liabilities connected with Stellar.
Orbcomm began the sales process for Stellar back in 2009 as it sought to off-load non-core assets and to focus mainly on its more lucrative network services business.
The move led to Orbcomm presenting Stellar’s results as discontinued operations in its financial statements from the latter half of 2009 and, in its H1’10, results the company recorded an impairment charge of US$3.3m to write down the net assets of Stellar in anticipation of a sale.
Founded in 1995, Stellar designs and manufactures data communications products for use on the Orbcomm satellite network for two-way messaging, tracking and monitoring applications.
Commenting on the acquisition, Polina Braunstein, president and CEO of Quake Global, said: “Adding Stellar’s catalogue of Orbcomm modems to the already extensive line of Quake communicators will strengthen our long-standing relationship with Orbcomm and will reinforce Quake’s position as the leader among satellite M2M device manufacturers.” As well as significantly broadening its product portfolio, the acquisition gives San Diego-headquartered Quake a new East Coast base at Stellar’s offices in Dulles, Virginia.
Orbcomm revealed the completed sale as part of its second quarter results announcement in which it reported a 15.8% year-on-year rise in Q2 total revenues to US$7.8m, dominated by services revenues of US$7.3m.
With costs and expense down by 3.7% to US$7.6m, the company made an operating profit of US$249,000 in the second quarter, compared to an operating loss of US$1.1m for the same period in 2009.
However, given the US$3.3m impairment charge resulting from the Stellar sale, Orbcomm reported a negative EBITDA of US$2.4m for the second quarter of 2010.
