Numerex Announces Definitive Agreement to Acquire Omnilink

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Numerex Announces Definitive Agreement to Acquire Omnilink

Merger Expands Product Portfolio in Core and Emerging Markets, Increases Recurring Service Revenues.

Numerex Corp, a leading provider of on-demand and interactive machine-to-machine (M2M) enterprise solutions announced today that it has signed a definitive agreement to acquire Omnilink Systems Inc., an award-winning M2M company providing reliable and intuitive tracking and monitoring solutions to businesses, consumers, and government agencies. With Omnilink’s technology, product offerings, and strategic alliances, Numerex expands its position in the fast-growing security and safety, tracking and monitoring market segments. Omnilink enables consumer solutions offered by the top tier-one wireless network operators, including mobile personal emergency response systems and child tracking services. According to a 2012 Frost & Sullivan market analysis, the 10-year U.S. data consumption forecast for the Security and Safety Segment totals 28.4% CAGR with connections growing from 2.8M in 2013 to 4.8M by 2018*.

The transaction is expected to be accretive to the Company’s non-GAAP earnings per share in 2014 and beyond, and to significantly improve its competitive position, while enabling a number of synergistic growth opportunities in the commercial, government, and consumer markets. Omnilink, founded in 2004 and based in the Atlanta metro area, is a leading provider of offender electronic monitoring, asset tracking, personal tracking, and lone worker safety solutions. Omnilink offers a SaaS (Software-as-a-Service) recurring revenue model selling to and through market leaders across many industries. Its SaaS-based recurring revenues of $11 million account for the majority of the nearly $13 million in total sales recorded in calendar year 2013.

Kelly Gay, President and CEO of Omnilink said:
“We are very pleased to be part of Numerex, a company well-regarded for delivering interactive and on-demand M2M products and services along with innovative enterprise solutions, and that shares our core belief that M2M technology can change the world that we live in. We couldn’t be more excited to be part of the Numerex family and work with some of the best M2M technology leaders in the world.”

Commenting on the pending acquisition, Stratton Nicolaides, CEO and chairman of Numerex said:
“We welcome Kelly Gay, Omnilink’s CEO, and our new associates to the Numerex family. We are combining two highly talented and seasoned teams who have been addressing the needs of the M2M and Internet of Things (IoT) marketplace since the industry’s inception. We are excited by the prospects of utilizing Omnilink’s robust M2M platform, technology, deep domain expertise, and strong industry relationships to drive opportunity in both existing and adjacent markets. We see the combination of Omnilink and Numerex as unique in that it creates significant growth opportunities through product enhancement and channel expansion.”

“We expect this transaction will strengthen our development roadmap in key enterprise verticals and will serve as a foundational step in our long-term growth strategy to be the market leader in select M2M solutions.”

The definitive agreement provides that Numerex will pay $37.5 million in cash for the business. Both parties expect to close within 30 days. The transaction will be funded through cash-on-hand and a $25 million term loan to be provided by Silicon Valley Bank.

*Frost & Sullivan 2012, US M2M Communications Markets: Data Consumption and Connection Forecasts in the Security and Safety Segment, United States, 2009-2018.
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