Mobile asset tracking and wireless data company @Road Inc. announced it will acquire rival wireless enterprise vendor MDSI Mobile Data Solutions Inc. in a deal worth $86 million. The agreement is the latest in the rapidly consolidating wireless data market.
@Road said the combined company’s annual revenues total $110 million, and it will count close to $100 million in cash balances, 650 employees, more than 125,000 subscribers and more than 80,000 licensed users worldwide. @Road said it plans to cross sell the companies’ products, and that the acquisition of MDSI opens up opportunities in the utilities, telecommunications, and cable and broadband markets.
“Our customers and prospects, especially our large customers and prospects, have been asking for an integrated mobile resource management solution that allows them to manage both mobile workers and their work,” said Krish Panu, @Road’s president and chief executive officer. “We believe that the complementary integration of the two companies’ products and services will comprehensively address the entire workflow.”
Investor reaction to the deal was mixed. @Road’s stock was down more than 10 percent after the deal to $11.85 per share, while MDSI’s stock leapt more than 50 percent to $8.67 per share.
Under the terms of the agreement, MDSI shareholders can trade in their stock for either 0.75 shares of @Road common stock or $9 in cash for each MDSI share. If all MDSI shareholders decide to receive @Road common stock, MDSI shareholders will own 10 percent of @Road’s stock. The companies expect the deal will close in the third quarter.
The acquisition is the latest in a series of major deals in the space. Sybase Inc. recently purchased wireless enterprise rival XcelleNet Inc. for a blockbuster $95.2 million, and Square Enix recently purchased UIEvolution, M-Qube bought Sharp Robot, and TeleCommunication Systems Inc. bought Aether Systems Inc.’s wireless enterprise division.
@Road sells technology to businesses to track drivers and mobile workers, as well as technology to remotely access corporate information. MDSI sells similar technology, including technology for wireless corporate access.
