Digi acquires Opengear for $140m
November 19, 2019
IoT connectivity firm Digi International is to acquire New Jersey-based Opengear for $140m.
Founded in 2004, Opengear delivers critical IT infrastructure, including failover-to-cellular and out-of-band management, to Fortune 100 companies and other users. Headquartered in New Jersey, it has R&D operations in Brisbane, Australia, and Silicon Valley. It has an additional office in Utah.
Minnesota-based Digi provides IoT connectivity products, software and services. It has signed a definitive agreement to acquire Opengear, a provider of secure IT infrastructure products and software, for upfront cash of approximately $140m with a potential for contingent consideration of up to an additional $15m based on revenue performance through 2020. The closing of the transaction is subject to customary conditions, including antitrust regulatory clearance.
"Joining forces with Opengear gives customers an expansive, high-value, technology portfolio that is hardware enabled and software defined," said Ron Konezny, president and CEO of Digi International. "Both companies have a deep commitment to our customers and will continue to invest in product development to deliver business- and mission-critical solutions."
Opengear’s provisioning, orchestration and remote management of network devices, through software and appliances, enables technical staff to manage their data centres and remote network locations. It is expected to retain its existing office locations and future office consolidations, if any, will be designed to reduce disruption to employees and customers.
"Digi and Opengear will mesh well as we share so many of the same values in how we treat our customers and employees," said Opengear CEO Gary Marks. "Our products are complementary, so customers and partners will get exceptional choice."
To finance the purchase, Digi expects to use a combination of cash on hand and debt financing under a $150m facility that BMO Harris Bank has committed to provide to Digi. Canaccord Genuity served as financial advisor to Digi on the acquisition, Stephens Inc advised Digi in obtaining the debt commitment, and Faegre Baker Daniels served as legal counsel to Digi on the transactions. Digi expects the acquisition to be immediately accretive to earnings.