RACO Wireless is buying GPS software developer Position Logic, adding asset tracking applications to its M2M connectivity solution. Both RACO and Position Logic offer ‘white label’ M2M solutions for carriers; RACO counts both T-Mobile USA and Sprint as customers. Both companies also work directly with enterprise clients as well. RACO currently has about 700 customers and Position has about 400, according to RACO CEO John Horn.
Horn said that the companies have only five customers in common, primarily because they operate in different geographic regions. “85% of their business is in Central and South America,” said Horn. “That’s one of the reasons our relationships with EE and Telefonica, and getting those established, has been so important for us. This has been in the works for quite a while, we knew it was coming, so it became critical for us to have all those carrier relationships so that we could go out into this space and talk to those people and create a full solution. [RACO’s} OMS platform is easy to use on the wireless side, their platform is easy to use on the application side.”
RACO and Position Logic each employ roughly 50 people, and RACO CEO John Horn says both companies will add employees in the wake of the merger. “They’re growing very quickly, we’re growing very quickly,” he said. Position Logic’s president and CEO Felix Lluberes and its CTO Hong Long with both join RACO’s leadership team.
Financial terms of the deal were not disclosed. Last fall private equity firm Inverness Graham took a controlling interest in RACO, and RACO said at the time that it hoped to use the new capital for acquisitions and organic growth.
The M2M market is poised for dramatic growth; according to Machina Research it will be worth $1.2 trillion by 2022. THe firm projects that one third of that amount will come from M2M services, the rest from devices and installation. RACO’s John Horn said he currently sees strong growth in almost every industry segment, with the notable exception of the energy industry.
“Energy seems to be facing challenges,” he said. “Medicine is still growing slowly but it’s finally starting to get some traction. And every other segment is just growing very quickly whether it’s security, commerce, vending, asset tracking.” Horn said the strongest segement for M2M is “anything to do with vehicles.”
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