ORBCOMM To Acquire PAR Technology Subsidiary
28 Dec 2011
Global satellite data communications company with focus on Machine-to-Machine communications ORBCOMM Inc. and leading provider of hospitality technology and services, PAR Technology Corporation, announced that their entering into a definitive agreement under which ORBCOMM will acquire the assets of PAR's subsidiary, PAR Logistics Management Systems, which is a leading provider of advanced solutions for monitoring transport assets and cargo in the transportation and distribution industries.
"The addition of PAR LMS's customer base and advanced technology platform strengthens ORBCOMM's foundation of value-added services and our ability to offer the most advanced products in the fast-growing telematics industry," said ORBCOMM's CEO Marc Eisenberg. "We expect to offer customers increased features, higher levels of integration and increased scale by adding PAR LMS to our portfolio of leading edge businesses. We look forward to welcoming PAR LMS's employees and customers to ORBCOMM."
On PAR's side, Paul B. Domorski, Chairman and CEO commented: "We are pleased with this agreement, which comes at the end of a thorough review and sale process. The decision to sell PAR LMS resulted from our board's evaluation over the past year of various strategic alternatives to position the company for long-term growth. Focusing on the core businesses will benefit customers and shareholders and the sale of PAR LMS is an important step forward to unlocking the intrinsic value of PAR's underlying assets. ORBCOMM's proven experience in the telematics industry; cutting-edge technology resources and breadth of global data communications services will significantly benefit PAR LMS's current customers."
PAR LMS is acquired for approximately $6 million at closing, comprised of cash and common stock, plus the potential of up to $4 million in additional consideration based on achieving specific sales targets. The transaction, expected to close in mid-January 2012, will add to the company's revenue growth and is expected to be accretive to its important operating metric, adjusted EBITDA, by the end of 2012. ORBCOMM expects to realize benefits and synergies from the combined businesses in service delivery, device manufacturing, and other operating costs.
Adding new vertical markets to ORBCOMM, the acquisition of PAR LMS will enhance the company's leading position in providing efficiency, predictability and quality to cold chain management. By expanding its satellite, terrestrial and dual-mode offerings and advancing sales growth in these attractive business segments, the combined platform supports ORBCOMM's growth strategy. PAR LMS adds strategic channel relationships, a broad customer base and a strong technology platform. ORBCOMM plans to extend its services directly to PAR LMS's customers as well as leverage improved economies of scale in manufacturing and service delivery.