Satellite-based asset tracking company SkyBitz has been acquired by remote monitoring solutions specialist Telular for approximately US$42m.
The consideration composition is split between US$35m in cash and US$7m from around one million newly issue…
Satellite-based asset tracking company SkyBitz has been acquired by remote monitoring solutions specialist Telular for approximately US$42m.
The consideration composition is split between US$35m in cash and US$7m from around one million newly issue shares. Telular stated that it will fund the cash portion through a US$30m 5-year 4% term loan from Silicon Valley Bank and cash-on-hand. The purchase price represents an acquisition multiple of approximately 8.4 times SkyBitz’s 2011 EBITDA.
The transaction marks the end of an almost year long sales process for SkyBitz. As SatelliteFinance exclusively revealed back February 2011, the company’s venture capital investor owners had been looking for an exit and mandated Oppenheimer & Co. to approach potential interested parties.
Commenting on the transaction, Joseph Beatty, president and chief executive officer of Telular, said: “I am very excited about the acquisition of SkyBitz as it gives us the leading position in an adjacent M2M vertical market, provides immediate incremental cash flow and builds upon our stream of high-margin, recurring service revenues.
“SkyBitz’s management approach and growth objectives fit very well with Telular’s strategy and include growing its installed base of units, enhancing its international presence, and entering new vertical markets related to asset tracking. Combined with Telular’s existing portfolio of Telguard and TankLink services, we can address a much larger market opportunity and expand our technology base with satellite communications capabilities that will complement our historical expertise in cellular communications.”
The purchase of SkyBitz continues Teleular’s strategy of making bolt-on acquisitions to add new vertical markets to its M2M solution. In 2009, Telular snapped up tank monitoring specialist TankLink and then earlier this year expanded the business by buying the SMARTank line of business from SMARTLogix, TankLink’s largest value-added reseller, for US$6m.
Telular stated that the combined companies would create the largest “pure player” asset tracking and management company in the world. For the current fiscal year ending December 31, 2011, SkyBitz expects to record US$35m million of revenue, of which 45% will be derived from recurring monitoring services. By the end of the year, SkyBitz expects to be tracking and managing approximately 190,000 assets, a net increase of approximately 11% over the end of the prior year.
Since 2000, SkyBitz has raised over US$45m in four funding rounds from a series of venture capital firms including CIBC Capital Partners, AIG Highstar Capital, Inverness Graham Investments, Motorola Ventures and ITV, a fund of Cordova Ventures. In October 2008, Orix Venture Finance, a New York-based venture capital company, provided a US$5m senior secured loan and US$3m revolver to SkyBitz, its first debt financing.
The acquisition is subject to the approval of a communications licence transfer by the FCC, and is expected to close in 60-90 days.
