CalAmp Announces Definitive Agreement to Acquire Operations of Wireless Matrix Corporation
CalAmp (NASDAQ: CAMP), a leading provider of wireless products, services and solutions, announced today that it has signed a definitive agreement to acquire the operations of Wireless Matrix Corporation (TSX: WRX), a Herndon-Virginia-based wireless data communications solutions company. CalAmp expects to leverage Wireless Matrix's mobile workforce management and asset tracking applications for customers in its core verticals, while also expanding its turnkey offerings to address new markets. The transaction is expected to be accretive to CalAmp's non-GAAP earnings per share in fiscal 2014 and beyond, and to significantly improve CalAmp's competitive positioning and growth prospects.
Wireless Matrix was founded in 1991 and is a leading provider of fleet tracking applications and satellite communications services to the utility, oil and gas, rail and municipal verticals as well as to service fleets of large enterprise customers in North America. Its SaaS-based high margin recurring revenues account for approximately 85% of their total sales, with total revenues of approximately $30 million a year based on their just announced second quarter results.
The definitive agreement provides that CalAmp will acquire the U.S subsidiary of Wireless Matrix, which conducts all of their operations, for a cash payment of $53 million. As part of the assets to be acquired, CalAmp expects to receive cash in the estimated amount of $5 million. CalAmp plans to fund the purchase from the proceeds of an equity offering of approximately $35 million, bank debt and on-hand cash. The transaction is subject to customary closing conditions and is expected to be completed in March 2013.
Commenting on the pending acquisition of Wireless Matrix, Michael Burdiek, President and Chief Executive Officer of CalAmp, said, "The acquisition of Wireless Matrix will position CalAmp as a leading provider of higher margin integrated hardware and software solutions. We are excited by the prospects of leveraging Wireless Matrix's robust mobile workforce management and asset tracking applications for customers in our energy, rail transportation and public safety verticals. We also see the opportunity to expand our turnkey offerings to global enterprise customers in new verticals such as construction, agriculture, and mining equipment. Importantly, we expect this transaction will accelerate our development roadmap and be a foundational step in our long term growth strategy, enabling CalAmp to offer higher margin turnkey solutions for new and existing customers. Overall, we expect this acquisition will accelerate our growth prospects within target markets and significantly enhance our competitive position."
Commenting on the acquisition, Rick Myers, Executive Chairman of Wireless Matrix, said, "We are very pleased to be joining forces with CalAmp, a company with a long, successful history of delivering cost-effective high quality wireless solutions. I am excited about the opportunity to combine the strengths of our two companies in addressing the needs of the growing MRM marketplace. We look forward to delivering even greater value to our customers in the future as we create a new standard for integrated hardware and software solutions for fleet management and asset tracking applications."
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.