ORBCOMM, www.orbcomm.com, with its unique ability to provide its asset messaging and monitoring solutions to the construction industry, will be expanding globally following its acquisition of SkyWave Mobile Communications, www.skywave.com, for $130 million.

By purchasing the Canadian-based company, ORBCOMM picks up SkyWave’s 25,000 subscriber units, 400 channel partners, approximately $60 million in annual revenues, and $12 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). SkyWave is a major M2M service provider on the Inmarsat, www.inmarsat.com, global L-band satellite network.

As a result of the deal, ORBCOMM increases its amount of combined engineering teams and sets itself up to upgrade economies of scale in both operations and manufacturing. ORBCOMM currently provides its services to companies such as Caterpillar, www.cat.com, Hitachi Construction Machinery, www.hitachiconstruction.com, and Volvo Construction Equipment, www.volvoce.com, to help with fleet operations.

Additionally, opportunities for distributing services on a global scale, with assistance from Inmarsat, increase through SkyWave’s distribution channels in South America, Asia, and the Middle East. By venturing into areas of Eastern Europe and Asia, ORBCOMM will have access to multiple vertical markets, including security and marine.

This deal is another in a series of events which has kept ORBCOMM busy the last several months. In July, the company announced it had launched six satellites into space designed to improve data transmission for its customers.

The acquisition was done on a cash-free debt-free basis. Of the $130 million purchase price, $122.5 million will be in cash from ORBCOMM, with the remaining $7.5 million coming from a promissory note to Inmarsat for a portion of its interest in SkyWave, which will be offset by a payment due from Inmarsat from a separate commercial agreement. That agreement allows ORBCOMM and Inmarsat to jointly own SkyWave’s IDP technology (IsatData Pro), and Inmarsat to acquire SkyWave’s satellite network assets in Laurentides, Canada; Burum, Netherlands; and Auckland, New Zealand.

Pui-Ling Chan, CEO, SkyWave, says, “We are excited about the combination of our two organizations, which will create a leading force in the industry to provide more products, applications and tool sets aimed at the “Internet of Things.” Together, we have the capabilities to serve customers of all sizes, locations, or sectors with one of the most comprehensive and competitive portfolios, as we lead the M2M industry to a new level.”

ORBCOMM is planning to make SkyWave’s products available through SkyWave’s current channel, ORBCOMM’s distribution channel, and Inmarsat’s network of distributors.

While the board of directors for each company has approved the deal, official closing of it is not expected until sometime in early 2015 per receipt of regulatory approvals.

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