Novatel Wireless to Acquire EnforaBy Novatel Wireless Inc., PRNE
Sunday, November 7, 2010
Uniquely Positions Novatel Wireless to Address Fast-growing M2M Market
SAN DIEGO, November 8, 2010 - Novatel Wireless, Inc. (Nasdaq: NVTL), a leading provider of wireless
broadband solutions, has entered into a definitive agreement to acquire
Enfora, Inc., a privately-held, Texas-based provider of intelligent
asset-management solutions utilizing wireless technology and
machine-to-machine (M2M) communications, for approximately US$64.5 million in
cash at closing, subject to certain working capital adjustments. Possible
additional consideration of up to US$6 million is contingent on certain
performance targets being met.
Enfora had revenues of US$61.3 million during the 12 month period ended
September 30, 2010, with gross margins of approximately 36 percent. Novatel
Wireless expects the acquisition to be immediately accretive to its non-GAAP
Enfora sells to a diverse base of customers, which includes enterprises,
applications service providers, OEMs and distributors. Enfora's product
portfolio consists of smart M2M solutions — embedded platforms, integrated
platforms, and embedded software — based on a distributed intelligent and
customizable architecture that provides a valuable link between an enterprise
and its remote assets. According to ABI Research, the market for cellular M2M
connection revenue is expected to grow at an annual compound rate of more
than 22 percent through 2014.
"This acquisition creates a market leader in wireless data selling into
all end markets: enterprise, consumer and vertical markets," said Peter
Leparulo, Chairman and CEO of Novatel Wireless. "This acquisition expands our
addressable market, broadens our range of complementary products, diversifies
our customer base and enhances operating leverage. It will also strengthen
our competitive position by leveraging our combined research and development
talent and customer relationships. Enfora, more than any other company
providing M2M data communications, is focused on adding value with customized
software and services and fits with our business strategy of combining
hardware and software into integrated solutions."
Key benefits of the acquisition include: - Diversifying Novatel Wireless' customer base and product lines into adjacent markets. - Advancing the company's strategy of providing intelligent devices to all end markets -- enterprise, consumer, and vertical applications. Enfora has developed differentiated solutions for key market segments, including transportation, industrial automation, security, and healthcare. - Creating a strong growth profile by bringing together long-term customer relationships with wireless carriers, cable operators, distributors, retailers, MVNOs, leading OEMs in both mobile computing and vertical markets, enterprises, and application service providers. - Leveraging the research and development, product portfolios, and geographic reach of the combined company.
"I am very pleased to welcome Mark Weinzierl, founder and CEO of Enfora,
to our senior management team," added Mr. Leparulo. "His leadership and
expertise will be a great asset to Novatel Wireless moving forward."
"We are bringing together two clear leaders in data communications," said
Mark Weinzierl. "Our customers will benefit greatly from Novatel Wireless'
leading-edge technology, strong relationships with mobile operators, and
financial strength. Our combined company will be well positioned to address
the growing demand for wireless data solutions and associated software."
Enfora will operate as a Novatel Wireless business unit, and the combined
company will leverage synergies in product development, sales channels and
Additional Terms of the Transaction
Novatel Wireless and Enfora have signed an Agreement and Plan of Merger
pursuant to which Enfora will become a wholly-owned subsidiary of Novatel
Wireless. The acquisition is expected to close by the end of November. A
controlling majority of Enfora stockholders has irrevocably consented to the
The purchase price includes the pay down of all debt. The acquisition
will be funded from cash on hand. As of September 30, 2010, Novatel Wireless
had approximately US$183 million of cash and marketable securities on its
balance sheet, with no debt.
Cowen and Company is acting as exclusive financial advisor to Novatel
Wireless in connection with this transaction. Jefferies & Co. is acting as
exclusive financial advisor to Enfora.
Conference Call Information
Novatel Wireless will host a conference call and live webcast for
analysts and investors at 8:00 a.m. ET today to discuss details of the
acquisition. For parties in the United States and Canada, call 877-941-8632
to access the conference call. International parties can access the call
The webcast will be accessible from the "Investor Relations" section of
the Company's website at www.novatelwireless.com. The webcast will be
archived for a period of 90 days. A telephonic replay of the conference call
will also be available two hours after the call and will run until November
15. To hear the replay, parties in the United States and Canada should call
800-406-7325 and enter pass code 4375599. International parties should call
+1-303-590-3030. In addition, Novatel Wireless' press release will be
accessible from Novatel Wireless' website before the conference call begins.
About Novatel Wireless
Novatel Wireless is a leader in the design and development of innovative
wireless broadband access solutions based on 3G and 4G wireless technologies.
Novatel Wireless' Intelligent Mobile Hotspot products, software, USB modems
and embedded modules enable high-speed wireless Internet access on leading
wireless data networks. The Company delivers specialized wireless solutions
to carriers, distributors, OEMs and vertical markets worldwide. Headquartered
in San Diego, California, Novatel Wireless is listed on NASDAQ: NVTL. For
more information please visit www.novatelwireless.com. (NVTLG)
(C) 2010 Novatel Wireless, Inc. All rights reserved. The Novatel Wireless
name and logo are trademarks of Novatel Wireless, Inc. Other company, product
or service names mentioned herein are the trademarks of their respective
Enfora is a leading provider of intelligent wireless asset management
solutions, enabling enterprises to access, analyze and leverage information
from their geographically dispersed assets using location-based monitoring
and control and asset management applications. Enfora's solutions, consisting
of embedded wireless software, network edge wireless platforms, and
enterprise software, are based on its distributed intelligent architecture
that provides a link between an enterprise and its remote assets. Enfora
primarily serves the transportation, security, energy and medical market
segments. For more information please visit www.enfora.com.
Cautionary Note Regarding Forward-Looking Statements
Some of the information presented in this release constitutes
forward-looking statements based on management's current expectations,
assumptions, estimates and projections. In this context, forward-looking
statements often address expected future business and financial performance
and often contain words such as "may," "estimate," "anticipate," "believe,"
"expect," "intend," "plan," "project," "will" and similar words and phrases
indicating future results. The information presented in this release related
to our acquisition of Enfora, the completion of this acquisition, the
expected benefits of this acquisition, and the financial and operational
results of the combined company following the acquisition is forward-looking.
Forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those anticipated in such
forward-looking statements. The company therefore cannot guarantee future
results, performance or achievements. Actual results could differ materially
from the company's expectations.
These factors, as well as other factors described in the reports filed by
the company with the SEC (available at www.sec.gov), could cause actual
results to differ materially. Novatel Wireless assumes no obligation to
update publicly any forward-looking statements for any reason, even if new
information becomes available or other events occur in the future, except as
otherwise required pursuant to applicable law and our on-going reporting
obligations under the Securities Exchange Act of 1934, as amended.
Investor contact: William A. Walkowiak, CFA Novatel Wireless +1-858-431-3711 email@example.com Media contact: Charlotte Rubin Novatel Wireless +1-858-812-3431 firstname.lastname@example.org
Investors, William A. Walkowiak, CFA, +1-858-431-3711, ir at nvtl.com, or Media, Charlotte Rubin, +1-858-812-3431, crubin at nvtl.com, both of Novatel Wireless
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