Telecoms business Telit Communications has bought out GlobalConect as part of its strategy to bolster its machine-to-machine (M2M) services, in a deal worth $2.9 million (£1.8 million).
Telecoms business Telit Communications has bought out GlobalConect as part of its strategy to bolster its machine-to-machine (M2M) services, in a deal worth $2.9 million (£1.8 million).
M2M technology allows wireless and wired systems to communicate with other devices of the same ability. GlobalConect provides connectivity services to customers of M2M applications.
According to a statement, the acquisition of GlobalConect will provide AIM-listed Telit with a ‘significant building block’ to grow its services business and improve its customer proposition.
Adding wireless connectivity to its services is an important factor for Telit’s continued growth and success, says chief executive of Italy-based Telit, Oozi Cats.
Cats adds: ‘Our customers expect superior M2M [services] from one source and with the acquisition of GlobalConect we will now be in a position to address their needs more comprehensively.’
Under the terms of the deal an initial $700,000 is payable in cash with the surplus $2.2 million to be satisfied by the issue of 800,000 newly issued ordinary shares.
Additionally, should conditions related to the performance of GlobalConect be met, and Telit’s share price does not reach 170p, GlobalConect will receive up to 360,000 extra shares in three years.
Dan Amir, chief executive officer of GlobalConect, comments: ‘We have an opportunity to leverage our activity within Telit’s global customer base to contribute significantly to building Telit’s service offering.’
The deal is the second for Telit in 2011 following its January purchase of Motorola M2M for $26 million.
Telit recorded revenues of $131.7 million for the year ended 31 December 2010 and EBITDA of $12.4 million.
