Telit Communications revealed this morning it has bought GlobalConect for a US$2.9 million in cash and shares.
GlobalConect provides the wireless connection used in machine-to-machine applications created by companies such as Telit.
The newly-acquired company it is expected to become a major “building block” of the enlarged Telit business.Around US$700,000 of the acquisition costs will be met in cash, while 800,000 shares are being issued at 170 pence each.
Telit said it could issue more shares depending on the performance of the GlobalConect, and the share price – particularly if it fails to hit 170 pence.
Telit chief executive Oozi Cats said: “Adding wireless connectivity to our offering is an important factor for Telit’s continued growth and success. Our customers expect superior m2m solutions from one source and with the acquisition of GlobalConect we will now be in a position to address their needs more comprehensively.”
GlobalConect founder Dan Amir will stay on as Telit’s head of connectivity activities.
He added: “I am excited about the move to Telit. We have an opportunity to leverage our activity within Telit’s global customer base to contribute significantly to building Telit’s service offering.”
Telit is a specialist in the field of wireless machine-to-machine communications (M2M). Put simply M2M enables one machine to talk to another machine via a wireless network. Telit is the only pure play M2M company listed in London and one of the market’s big three players.
Earlier this month a study by Beecham Research, a consultant specialising in the M2M market, said Telit’s market share of the ‘modules’ market over 2010 rose from 12.4 per cent in 2009 to 16.1 per cent in 2010.
If Telit’s acquisition of Motorola’s M2M unit earlier this year is included in Beecham’s analysis, Telit’s share of the global industrial grade m2m modules market jumps to 22.2% on a pro forma basis.