VANCOUVER, British Columbia-The mobile enterprise market continued its contraction with Infowave Software entering an agreement to acquire Telispark, an Arlington, Va.-based provider of enterprise mobility applications, for $8.4 million.
The purchase price will be paid in about 46 million Infowave common shares issued in two tranches. An initial purchase of about 76 percent of Telispark shares was completed Wednesday. The remaining Telispark shares will be acquired following a number of conditions, Infowave said, including approval by Infowave shareholders.
Infowave also announced it arranged a $30 million line of credit facility as a condition of the acquisition. Gerald Trooien, a shareholder and director of Infowave, has agreed to provide a standby $3 million line of credit until Dec. 31, 2005, to Infowave.
Any amounts borrowed under the facility, along with interest at a Canadian Chartered bank’s prime rate plus 8 percent will be repayable on or after Dec. 31, 2005. Infowave has issued Trooien warrants entitling him to acquire a minimum of 7.5 million Infowave common shares and up to a maximum of 18.5 million shares. In addition, Deloitte Consulting L.P., the largest Telispark shareholder, will hold about 19 percent of the issued and outstanding Infowave common shares following the acquisition.
Telispark has deployed field service, asset management and inventory management applications for large enterprises, including Shell Oil, the U.S. Navy and Hydro One. The buy will give Infowave, which sells mobile e-mail and infrastructure products to carriers and businesses, a bigger enterprise play, according to Michael Blumberg with D.F. Blumberg Associates, a management consulting firm.
“This acquisition positions Infowave to take full advantage of the increasing market demand for both enterprise and carrier mobile solutions,” said Infowave Chief Executive Officer Jerry Meerkatz. “By combining the application strength of Telispark with Infowave’s suite of wireless middleware solutions, we further extend our value proposition to enterprise customers.”
