M2M player Sierra Wireless has agreed a $21 million takeover of In Motion Technology aimed at bolstering its position in the transit and commercial fleet markets.
The takeover is subject to normal regulatory sign-offs and the approval of In Motion (New Westminster, Canada) shareholders, but expected to close in early March 2014.
Sierra Wireless (Vancouver, Canada) plans to fund the purchase from its existing cash balance.
In Motion develops in-vehicle mobile routers combined with security and management software, designed to help customers connect and manage mobile operations, vehicles and workforces more efficiently and reliably.
Sierra Wireless believes In Motion’s product portfolio is complementary to its own and will give it a strong leadership position in important growth segments.
“In Motion will strengthen our leadership position in M2M and broaden our Enterprise Solutions portfolio,” said Jason Cohenour, chief executive of Sierra Wireless.
“The Sierra Wireless and In Motion businesses are highly complementary, and together will hold a unique competitive position,” he added. “We will have the products, channels, and technology needed to offer the most comprehensive suite of solutions to our customers and expand our market share in high growth, high value markets such as public safety and commercial fleets.”
In Motion generated revenues of about $15 million in 2013, reporting a gross margin of approximately 50%.
Sierra Wireless has yet to report full-year results for 2013, but made $323 million in revenues over the first nine months of the year, up from just $288 million during the first nine months of 2012.
The company’s net earnings also rose to $56 million from about $7 million over the same period.
“We are experiencing unprecedented growth in the market for mobile enterprise solutions, and joining forces with the clear industry leader will enable the combined organization to capture a greater share of the opportunity,” said Dean Rockwell, chief executive of In Motion Technology.