[Via Satellite 11-07-2014] Orbcomm, a global provider of Machine-to-Machine (M2M) solutions, has entered into a definitive agreement to acquire SkyWave Mobile Communications, the largest M2M service provider on the Inmarsat global L-band satellite network, for $130 million. Based in Ottawa, Canada, SkyWave has more than 250,000 subscriber units, 400 channel partners, an estimated annualized $60 million in revenues and more than $12 million in adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).
Orbcomm will acquire SkyWave on a cash-free debt-free basis. Under the terms of the agreement, SkyWave will be acquired for $130 million, $122.5 million of which is to be in cash provided by Orbcomm and $7.5 million in the form of a promissory note to Inmarsat for a portion of its interest in SkyWave, to be offset by a payment due from Inmarsat under a separate commercial agreement. Under the commercial agreement, Orbcomm (through SkyWave) and Inmarsat will jointly own the IDP technology, which Inmarsat intends to make available through its reseller channel. Inmarsat will acquire and operate SkyWave’s satellite network assets located primarily at three Inmarsat earth stations in Laurentides, Canada; Burum, Netherlands; and Auckland, New Zealand for $7.5 million.
With the addition of SkyWave, Orbcomm will have one of the largest combined engineering teams in the M2M industry and will gain significant economies of scale in operations and manufacturing. SkyWave’s distribution channels in South America, Asia and the Middle East, along with Inmarsat’s support, now provide Orbcomm with a broader global distribution. Orbcomm will gain access to new geographies in Eastern Europe and Asia and diverse vertical markets such as security and marine. The addition of SkyWave’s higher bandwidth, low-latency satellite products and services that leverage the IsatDataPro (IDP) technology also further expands the breadth of Orbcomm’s solutions portfolio.