An Ottawa satellite company with 250,000 subscribers and 400 channel partners has been acquired by an American provider of machine-to-machine solutions.
New Jersey-based ORBCOMM is acquiring Skywave Mobile Communications for $130 million, but SkyWave CEO Pui-Ling Chan said the enterprise value is actually around $170 million when cash on hand is included. This will be distributed to SkyWave shareholders and staff.
“Everybody was very happy yesterday,” Mr. Chan said.
He said ORBCOMM shares his company’s commitment to customers and passion for innovation, but the top priority in closing the deal was the future of the Skywave’s 165 employees in Ottawa and 15 other workers scattered around the globe.
“It’s the employees that got us here,” said Mr. Chan, adding that his staff still have jobs and cash incentives to stay with ORBCOMM.
ORBCOMM CEO Marc Eisenberg said he expects shareholders and customers of both companies will find value in the deal.
“Our customers will benefit from access to one of the industry’s broadest set of complete solutions, global regulatory authorizations and satellite-based connectivity options. We also expect this added scale to create sustainable long-term shareholder value,” Mr. Eisenberg said in a statement.
Mr. Chan said SkyWave was actually in acquisition mode itself when its Canadian venture capital investors decided they wanted out. That’s when SkyWave attained the services of American investment bank William Blair to help them switch gears.
Mr. Chan said there were 12 indications of interest and five offers. Talks with ORBCOMM started about a year ago, but the formal negotiations started in June and really picked up speed later in the summer.
Mr. Chan said he and his CFO have been offered jobs with ORBCOMM, in fact Mr. Chan has six different offers with the company.
“That kind of makes me feel good. I haven’t really even had time to think about it,” he said. He said he needs time to get to know ORBCOMM more, but he and will definitely stay to help with the transition.
“If it works out, we will stay,” he said.
ORBCOMM plans to make SkyWave’s products available through SkyWave’s current channel, ORBCOMM’s distribution channel and Inmarsat’s network of distributors.
The acquisition has been unanimously approved by both companies’ board of governors and is expected to close early in the new year, subject to regulatory approval