Fleet management company SkyBitz acquired for $42 million

Telular Corporation (Chicago, Ill., U.S.A.), a wireless M2M provider, last week announced the acquisition of SkyBitz, Inc. (Sterling, Va., U.S.A.), a provider of asset tracking equipment, for $42 million.  The deal is comprised of $35 million in cash and $7 million in shares of common stock.

Telular Corporation (Chicago, Ill., U.S.A.), a wireless M2M provider, last week announced the acquisition of SkyBitz, Inc. (Sterling, Va., U.S.A.), a provider of asset tracking equipment, for $42 million.  The deal is comprised of $35 million in cash and $7 million in shares of common stock. The cash portion will be financed with a $30 million five-year bank loan and cash on hand, according to Telular.

SkyBitz covers a variety of industries, such as trucking, oil and gas, construction, heavy equipment, chemical and government sectors.  The company also offers services in asset viability and optimization, remote monitoring and safety and security. By the end of the fiscal 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.

For the current fiscal year ending this month, SkyBitz expects to record $35 million of revenue, of which 45% will be derived from recurring monitoring services, and net income before non-cash items of approximately $5.0 million.

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, says the company.

“[The acquisition] 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,” says said Joseph Beatty, president and chief executive officer of Telular Corporation

The acquisition is subject to the approval of a communications license transfer by the FCC, and is expected to close in 60-90 days.