Proving the Business Case for the Internet of Things

Orbcomm announces $130 million takeover of SkyWave

Iain Morris
November 12, 2014

Satellite and M2M player Orbcomm has announced plans to acquire SkyWave Mobile Communications for a fee of $130 million, which provides a range of satellite-based M2M services for customers operating industrial vehicles, vessels and industrial equipment.

SkyWave’s customers have made use of its technology to track vehicle fleets and monitor industrial equipment that is often used in remote locations where cellular networks are unavailable.

Orbcomm (Rochelle Park, NJ, USA) says the acquisition will create the largest global space-based M2M company in the world.

The transaction also marks another phase of its collaboration with satellite operator Inmarsat (London, UK), whose satellite service is used by SkyWave (Ottawa, Canada).

SkyWave currently serves more than 250,000 subscriber units and has some 400 channel partners.

The company reports annual revenues of about $60 million and adjusted earnings before interest, taxation, depreciation and amortization of around $12 million.

“We expect the combination of SkyWave and Orbcomm to deliver significant value for both our shareholders and customers,” said Marc Eisenberg, Orbcomm’s chief executive. “By combining our complementary products, distribution channels and broad geographic footprints – with support from Inmarsat – we are adding significant scale to our business.”

“Our customers will benefit from access to one of the industry’s broadest set of complete solutions, global regulatory authorizations and satellite-based connectivity options,” he added. “We also expect this added scale to create sustainable long-term shareholder value.”

The tie-up should give Orbcomm one of the largest combined engineering teams in the M2M industry as well as significant economies of scale in operations and manufacturing.

Orbcomm will also be able to benefit from access to SkyWave’s distribution channels in South America, Asia and the Middle East.

Orbcomm says the acquisition has already been approved by the boards of directors of both companies but it still pending regulatory sign-off, which is expected in early 2015.
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