....to acquire SkyBitz, Inc., a leading provider of mobile resource management (“MRM”) solutions focusing on tracking and management of truck trailers, intermodal containers, sea-going containers, rail cars, power generators and rental equipment. The acquisition expands Telular’s position in the M2M space as a result of SkyBitz’s broad base of additional customers and proprietary SAAS technology platform. The combined companies will create the largest “pure player” asset tracking and management company in the world. SkyBitz’s unique Global Locating System (GLS) satellite-based technology provides real-time visibility of many asset types. SkyBitz addresses a multi-billion dollar market opportunity by reducing operating costs, increasing efficiency and aiding in the compliance with regulatory requirements across an increasingly complex set of supply chains and business ecosystems. Transaction terms include a purchase price of $42 million, comprised of $35 million in cash and $7 million in newly issued shares of common stock. The cash portion will be financed with a $30 million five-year bank loan and cash on hand. The acquisition is subject to the approval of a communications license transfer by the FCC, and is expected to close in 60-90 days.
For the current fiscal year ending December 31, 2011, SkyBitz expects to record $35 million of revenue, of which 45 percent will be derived from recurring monitoring services, and net income before non-cash items of approximately $5.0 million. Further, by the end of their calendar fiscal year, SkyBitz expects to be tracking and managing approximately 190,000 assets, a net increase of approximately 11 percent over the end of the prior year. The expected impact on Telular’s projected 2012 results as previously announced is dependent upon the actual closing date of the transaction, and will be provided at that time. However, Telular does expect the acquisition to be accretive to its 2012 non-GAAP measure of net income before non-cash items. Oppenheimer & Co. Inc. is serving as the exclusive financial advisor to SkyBitz.
