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360 Capital takes significant stake in Telit Communications

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French private equity firm 360 Capital was revealed as a signficant investor in Telit Communications (LON:TCM) earlier this week as it increased its stake to 3.55 per cent. 

Describing itself as a 'dynamic investors', 360 is focused on technology driven projects and what it calls potential ‘killer innovations’ – referring to new types of technologies that could render existing products or systems obsolete.

360’s approach targets different types of companies.

The bulk of its investments - about 85 percent - are in innovative early-stage companies but it also allocates around 10 percent of its capital to high-growth, small cap’ public companies. 

On Wednesday Telit revealed that 360 Capital bought 1.5 million shares as it increased its stake from 2.1 to 3.6 million shares – crossing the 3 percent threshold that requires a regulatory announcement.

The French investment company now owns a 3.55 percent stake in the company. 

According to 360 Capital it invests between €2 and €8 million in small cap companies that have ‘significant potential of growth and penetration of huge emerging markets’.

At current prices - 97 pence a share - 360 Capital’s shares are worth about €4 million, or £3.5 million.

Telit is a world leader in machine-to-machine (M2M) communication, which very simply allows machines to talk to each other via a wireless network.

It is the only pure play M2M company listed in London and it is one of the market’s big three players.

M2M communications has multiple applications. The technology will allow new electricity and gas meters installed in a house to remotely send data back to a utility provider and cars to send information to insurance firms or to the nearest search and rescue team. 

In fact, technology exists today to allow your car to talk to your mobile phone, or your fridge to your stove.

And as smaller and cheaper computers are designed to process more data while consuming less power, so the M2M market will continue to expand and the number of applications that will be completed remotely will increase exponentially.

According analysts forecasts the market could be worth $1.5 billion by 2014.

Quick facts: Telit Communications PLC

Price: 128.4 GBX

AIM:TCM
Market: AIM
Market Cap: £167.19 m
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