Kore Wireless Group is acquiring fellow M2M company RacoWireless in an all-cash transaction. Financial terms were not disclosed.
As part of the announcement, Kore also said that the ABRY Partners investment firm has acquired a majority interest in Kore, enabling Kore to grow and broaden its scope. Kore's acquisition of Raco is the first step in that strategy.
Once the transaction is completed, the company will have offices in five countries and serve more than 3 million subscribers on behalf of more than 1,500 customers using services in more than 110 markets around the world. The acquisition is subject to certain regulatory and other consents, but it is expected to close before the end of the year.
"We are standing at a historic inflection point in our industry where scalability and innovation are critical, and the financial partnership with ABRY delivers the capital and expert support necessary to rapidly develop the scale demanded by global customers in what has so far been a fragmented market," said Alex Brisbourne, CEO of Kore, in a press release.
"Strategic acquisitions both in advanced connectivity and richer applications solutions are an important goal, as scale and global reach are of paramount importance to our large applications and enterprise customers," he added. "These customers seek to leverage new M2M technologies that enable more efficient, innovative, and in some cases, disruptive business models going forward."
Raco President John Horn, who will become the combined company's executive vice president and chief strategy officer, told FierceWirelessTech that the M2M/Internet of Things (IoT) industry is at an inflection point with scope and scale.
"You're starting to see big companies come into this space who are trying to figure out how to play in it, whether it's the Ciscos or the Intels, whoever, are looking to play in this space. You've got the carriers out there, you've got other companies that are trying to start up and do different segments of the market," he said.
"But I think what's really happening is the enterprise level companies, the Fortune 1000 companies are really looking at where and how they should play [in] the Internet of Things, and now we have scale, where they will look at us and go, 'wow, they have the breadth of products and the scale and the size.' … We're now the same size as the majority of carriers in the world, if not bigger," based on subscribers, geography and portfolio of services.
The combined company also will have relationships with four of the seven largest carriers in North America, in addition to a "pretty strong carrier footprint" throughout the world, he said.
Having one place for these enterprises to get their M2M needs met is important, Horn said. "The bottom line is whether you're connecting consumer devices, industrial devices, wearables or mobile devices, whatever vertical market segment you're in, you need application support, device support, activity support," he said. "Having one relationship, one pane of glass, one relationship to manage all these different moving parts globally is a huge, powerful thing for these companies." That way, they can focus on own products and customers.
But Horn said the transaction is just the first step for the new company. "There's going to be more to come," he said. "We're going to be expanding our geographic footprint and our technology footprint," adding that he could not release any details yet.
Horn said there will be some "shuffling of chairs," but the combined company is not planning layoffs.
- see the press release
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