CalAmp Enters Into Five-Year $25M Supply Agreement With Navman Wireless
CalAmp Corp. (NASDAQ: CAMP) announced that it has entered into a five-year supply agreement to provide at least $25 million of fleet tracking products to Navman Wireless, a global leader in GPS-based fleet optimization products and services. As part of the transaction, CalAmp has acquired certain products and technologies from Navman Wireless and established an R&D center in Auckland, New Zealand staffed by 14 employees transferred from Navman Wireless.
With this strategic supply agreement in place, CalAmp will be able to expand its international footprint in Asia Pacific, Western Europe and South America where Navman Wireless has a strong customer base. The assets acquired by CalAmp include technology for Mobile Display Terminals (MDT) and an MDT product line currently marketed to telematics OEMs globally. These MDT products will complement and expand CalAmp's existing Mobile Resource Management (MRM) product offerings and increase the size of CalAmp's served markets.
Total purchase consideration payable by CalAmp is approximately $6 million, comprised of $1 million paid in cash at closing, a $4 million non-interest bearing note payable over five years in the form of a rebate on products sold by CalAmp to Navman Wireless under the supply agreement, and royalties in the estimated amount of $1 million payable for MDT product sales by CalAmp during the first three years.
CalAmp expects the supply agreement to generate revenues of at least $5 million annually over five years, with additional growth opportunities through MDT product line sales. The acquisition is expected to be essentially breakeven on a GAAP basis and accretive on a non-GAAP basis for CalAmp's fiscal 2013, and accretive on both a GAAP and non-GAAP basis thereafter.
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