Proving the Business Case for the Internet of Things

UK's Stadium to pay up to $13.6 million for asset-tracking player United Wireless

Iain Morris
July 30, 2014
 
Electronics player Stadium Group has acquired asset-tracking specialist United Wireless for a maximum fee of £8 million ($13.6 million) in cash and shares.

United (Warrington, UK) provides connectivity services in the automotive and telematics sectors but also works with original equipment manufacturers on the development of Internet of Things-based vending, industrial equipment and asset-tracking services.

Stadium (Hartlepool, UK) says the technologies being developed by United – which employs 40 people at its UK facility – complement its own range of products and present significant opportunity for growth and synergies.

It expects the acquisition to be “earnings enhancing” in the first full year of ownership.

Under the deal, United will initially pay £5 million in cash and another £1 million in shares.

Should United exceed certain targets, Stadium will make an additional “earn-out” payment of £1.33 million in shares and £0.66 million in loan notes.

“This acquisition establishes Stadium as a credible player in the fast growing market for M2M wireless devices,” said Charlie Peppiatt, Stadium’s chief executive. “The successful integration of United will deliver the next step of our strategy to become a design-led electronics business by adding wireless connectivity to our integrated technology offering.”

Stadium provides a range of power products and integrated electronic manufacturing services and employs more than 800 people in the UK and Asia.

Its full fee of £8 million works out at about 6.7 times United’s earnings before interest and taxation on an annualized basis.

According to research from Berg Insight, demand for wireless M2M devices is expected to increase at a compound annual growth rate of 24% over the next five years, with the number of cellular M2M device subscribers reaching 490 million by 2018.
 
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