CalAmp signs five-year USD25m supply agreement with Navman Wireless.
TELECOMWORLDWIRE-May 8, 2012-CalAmp signs five-year USD25m supply agreement with Navman Wireless(C)1994-2012 M2 COMMUNICATIONS http://www.m2.com
CalAmp Corp (Nasdaq:CAMP), a provider of wireless products, services and solutions, announced on Monday that it has entered into a five-year supply agreement to provide at least USD25m of fleet tracking products to Navman Wireless, a provider of GPS-based fleet optimization products and services.
The company said that with this strategic supply agreement it will be able to expand its international footprint in Asia Pacific, Western Europe and South America where Navman Wireless has a strong customer base.
Also, as a part of the transaction, CalAmp has acquired certain products and technologies from Navman Wireless and established an R&D centre in Auckland, New Zealand staffed by 14 employees transferred from Navman Wireless.
The assets acquired by CalAmp include technology for Mobile Display Terminals (MDT) and an MDT product line currently marketed to telematics OEMs globally. These MDT products will reportedly complement and expand CalAmp's existing Mobile Resource Management (MRM) product offerings and increase the size of CalAmp's served markets.
The total purchase consideration payable by CalAmp is approximately USD6m, comprised of USD1m paid in cash at closing, a USD4m non-interest bearing note payable over five years in the form of a rebate on products sold by CalAmp to Navman Wireless under the supply agreement and royalties in the estimated amount of USD1m payable for MDT product sales by CalAmp during the first three years.
CalAmp expects the supply agreement to generate revenues of at least USD5m annually over five years, with additional growth opportunities through MDT product line sales.
The acquisition is expected to be essentially breakeven on a GAAP basis and accretive on a non-GAAP basis for CalAmp's fiscal 2013 and accretive on both a GAAP and non-GAAP basis thereafter.
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