ORBCOMM Inc., a satellite data communications company focused on two-way Machine-to-Machine (M2M) communications, and PAR Technology Corporation, a provider of hospitality technology and services, on Wednesday announced that they have entered into an agreement under which ORBCOMM will acquire the assets of PAR's subsidiary, PAR Logistics Management Systems (PAR LMS) for $6 million. PAR LMS is a provider of transport assets and cargo monitoring technology in the transportation and distribution industries.
Under the terms of the transaction, ORBCOMM (Fort Lee, N.J., USA) will acquire PAR LMS (New Hartford, N.Y., USA) for approximately $6 million, comprised of cash and common stock, plus the potential of up to $4 million in additional consideration based on achieving specific sales targets, says ORBCOMM. The transaction is expected to close in mid-January 2012.
"The decision to sell PAR LMS resulted from our board's evaluation over the past year of various strategic alternatives to position the company for long-term growth. Focusing on the core businesses will benefit customers and shareholders and the sale of PAR LMS is an important step forward to unlocking the intrinsic value of PAR's underlying assets," said Paul B. Domorski, PAR Chairman and CEO.
According to ORBCOMM, the company expects to see benefits from the acquisition in the service delivery, device manufacturing, and other operating costs. The combined platform expands the company’s satellite, terrestrial and dual-mode offerings and advancing sales growth. The company plans to extend its services directly to PAR LMS's customers as well as leverage improved economies of scale in manufacturing and service delivery.
In May, ORBCOMM's purchased StarTrak, also in the transportation solutions sector. The acquisition was valued at approximately $18.5 million.
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