CalAmp Buys AirIQ’s Vehicle Finance Division
OXNARD, Calif. - CalAmp Corp., a leading provider of wireless communication solutions, has agreed to acquire the Vehicle Finance division of AirIQ Inc., a leader in global wireless security, for cash consideration of $19 million. The Vehicle Finance division, which generated 2006 revenues of approximately $15 million and currently operates under the Aircept brand, sells Global Positioning Satellite (GPS) and cellular-based wireless asset tracking products and services to vehicle lenders that specialize in automobile financing for high credit risk individuals. The acquisition is expected to be accretive to CalAmp after excluding amortization of intangible assets arising from the acquisition.
AirIQ’s Vehicle Finance solution includes an integrated unit comprised of a wireless cellular transceiver, GPS receiver and computer processor that is installed in the vehicle. In addition, AirIQ’s proprietary back-office software, which CalAmp will use under a license agreement, manages the flow of information and allows lenders to access real-time information about the vehicle. If the vehicle is stolen or if payment is in default, lenders can remotely disable the vehicle and quickly and easily pinpoint its location.
“The acquisition of AirIQ’s Vehicle Finance division significantly expands CalAmp’s existing mobile resource management (MRM) business with a complete end-to-end solution and leading position in this burgeoning market,” said Fred Sturm, President and Chief Executive Officer of CalAmp. “We believe there is growing demand for this service by vehicle lenders seeking ways to mitigate payment default risk and preserve the value of their collateral. Moreover, as the equipment manufacturer and service provider, CalAmp will benefit through both hardware sales and recurring service revenue from an installed customer base of approximately 150,000 vehicles.”
Mr. Sturm concluded, “We plan to leverage this business by offering end-to-end products and services to our existing public safety and industrial monitoring and control markets. We also expect to realize approximately $1 million in annual savings by using system hardware developed by CalAmp. This acquisition represents another important step in our strategy to expand CalAmp’s wireless datacom business to complement our leadership position in the satellite television market.”
During calendar 2006, AirIQ’s Vehicle Finance division generated approximately $10 million of hardware sales and approximately $5 million of recurring data service revenue. On a blended basis, the 2006 gross margin of the Vehicle Finance business was approximately 35%. CalAmp expects to employ approximately 35 former AirIQ employees, and will operate the Vehicle Finance business from the existing facility in Lake Forest, California.
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