Singapore-based conglomerate ST Electronics has entered into an agreement to acquire Telematics, a subsidiary of Israel-based Ituran Location and Control Ltd., which owns 95.5% of Telematics. It expects to net $80m by selling its 93.96% of the stake.
Telematics, which contributed $9.6m in revenues and $2m in net profit to Ituran in the first half of fiscal 2007, develops radio frequency technology and wireless solutions for the Machine-to-Machine (M2M) industry.
ST Electronics expects the acquisition to augment its current offerings in the telematics solutions markets. It also intends to enter market for M2M application and wireless telemetry with this deal.
The acquisition of Telematics will immediately place ST Electronics among the top three global ITS players. We will be able to offer a full suite of ITS end-to-end systems solutions and services to our customers worldwide. Telematics, on the other hand, will be able to leverage our network and related IP for further growth, said Seah Moon Ming, president at ST Electronics.
According to the agreement, Ituran will also receive royalties for the next five year on the revenues generated by Telematics’ business in Korea and China. Telematics will also continue to provide Ituran its location technology and receive consultation and knowledge-sharing from the company in return for royalties for the next ten years.
Source: ComputerWire daily updates