Top IoT news ⊷ Internet of Things news

Novatel Wireless Enters Into Agreement to Sell Its Mobile Broadband (MiFi®) Business for $50,000,000

Novatel Wireless Enters Into Agreement to Sell Its Mobile Broadband (MiFi®) Business for $50,000,000

Novatel Wireless, a leading global provider of SaaS and solutions for the Internet of Things, today announced that it has entered into an agreement with T.C.L. Industries Holdings, whereby Novatel Wireless will sell to TCL its mobile broadband business (including its MiFi® branded hotspots and USB modem product lines) for a cash payment of US $50,000,000 payable at closing.

The closing of the transaction is subject to the receipt of various regulatory authority approvals, as well as the approval of Novatel Wireless’s stockholders and convertible noteholders. The closing of the transaction is expected to occur in the first quarter of 2017.

“The sale of Novatel Wireless’s mobile broadband business to TCL is the most transformative event in Novatel Wireless’s history, and punctuates our period of metamorphosis,” said Sue Swenson, Chair of the Board and Chief Executive Officer of Novatel Wireless.

Ms. Swenson added:

“Upon the closing of the transaction with TCL, Novatel Wireless will no longer sell any products it sold at the beginning of 2015. We will have transitioned the company from a hardware-only business with approximately 80% of revenues tied to one customer into a predominantly SaaS, services and solutions business with thousands of customers generating recurring revenues.”

“Going forward, we will deepen our focus on our recurring revenue IoT solutions such as our Ctrack telematics solutions, including fleet management and asset tracking & monitoring, and our Feeney Wireless (“FW”) business connectivity solutions, such as our recently launched Ignite offering.”

As of June 30, 2016, Novatel Wireless had 557,000 subscribers for its Ctrack and FW SaaS and services solutions, including 389,000 subscribers to its Ctrack telematics products. After the closing of the transaction, Ctrack is expected to account for approximately 70% of total corporate revenue. Since acquiring Ctrack in October of 2015, the company’s subscriber growth has increased in each successive quarter, highlighted with a 24% annualized growth rate for its Ctrack fleet management subscribers in the second quarter of 2016. In connection with the sale of Novatel Wireless’s mobile broadband business to TCL, Novatel Wireless plans to create a new public holding company (“Newco”) and a new operating structure. The management of Novatel Wireless is currently considering several names and logos to be adopted by Newco going forward.

“The restructuring of the company’s various business units into a new public holding company with a new operating structure will enable us to streamline the infrastructure of the ongoing organization, make more efficient use of our existing management talent, and allow us to more closely track the performance of our various business units and support our business initiatives,” said Michael Newman, Chief Financial Officer of Novatel Wireless. “Commencing in the first quarter after the closing of the transaction with TCL, we estimate that Newco will be generating approximately $90 million in annualized revenues, with non-GAAP gross margin of more than 60% and adjusted EBITDA margin of approximately 10%,” added Mr. Newman.

Source: http://globenewswire.com/
MachNation IoT platforms benchmark

Related posts

X