Sierra Wireless recently announced a definitive agreement to acquire Maingate, a Sweden-based provider of machine-to-machine connectivity and data management services, for $90 million. The acquisition will most likely be done around February 2015.
Maingate provides managed M2M connectivity and information management services to 500 plus customers throughout Europe, reaching a subscriber base of up to 500,000 connected devices. With a strong base of recurring income, Maingate expects 2014 revenue of US $19 million plus, as well as earnings before taxes, interest, depreciation, and repayment of $6 million USD. Sierra Wireless is hoping the transaction to be immediately accretive to their earnings.
Together, Sierra Wireless and Maingate will be able to offer their European customers complete device-to-cloud answers, with integrated hardware, implanted software development tools, device and subscription management, and wireless services.
Sierra Wireless will acquire the outstanding shares of Maingate, which include those held by Nordic private equity fund Verdane Capital VI. It will also keep the company’s M2M business, which includes wireless connectivity services for M2M. Maingate’s current shareholders will retain the Enterprise Solutions business (which will be transferred to a new company called Maingate Enterprise Solutions AB prior to closing), providing real-time data management tailored for energy services.
Maingate was founded in 1998 and was an innovator in offering wireless services exclusively for the M2M market. The company’s services are built on its M2M connectivity platform, and support direct interaction with the customer through its specialized service management platform.
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