Telit Communications (LON:TCM) has now completed its US$23 million deal to buy Motorola’s (NYSE:MSI) machine-to-machine (M2M) arm.
It is also buying inventories, relating to the newly-acquired product line, for $3.0 million over the coming months.
A large proportion of the deal has been funded by a £19 million placing - issuing 23.7 million shares - that was completed recently.
There has been considerable consolidation in the m2m sector of late and Telit had previously hinted that it was on the lookout for value-enhancing acquisitions.
The AIM-listed technology group - which designs and manufactures M2M modules that allow devices to talk to each other in an ‘internet-of-things’ - expects the deal to be earnings-enhancing in the first full financial year.
Telit reckons the newly combined businesses would have had consolidated pro forma revenues of about US$180 million in 2010.
Based on independent market forecasts, it is estimated that the combined business therefore would have had pro forma market share in excess of 20 percent for the year ended 31 December 2010.
When it first announced the deal Telit also highlighted that it would boost the company’s expansion into the growing market, it will open up opportunities for cross-selling of products as well as enhanced research and development capabilities and a broadening of Telit's m2m product offering.