Vecima Networks Announces Acquisition of Contigo Systems Inc.
VICTORIA, BC --(Marketwired - March 03, 2016) - Vecima Networks Inc. ("Vecima" or "Company") (TSX: VCM), an experienced designer and manufacturer of innovative technology in the broadband equipment market, today announced that it has acquired the assets of Contigo Systems Inc. ("Contigo"), a Vancouver-based private company.
Contigo is a leading provider of turn-key GPS solutions for fleet management, asset tracking and personal safety for small to medium sized fleets. Providing multiple forms of locatable devices and a state-of-the-art web platform, Contigo's solution is ideally suited to the large and growing market for commercial fleet management. The technology allows monitoring of disparate types of location devices from on-board monitoring/diagnostics devices to smartphones, all on one unified platform using wireless network infrastructure. Contigo's two key products are RideAlong, for commercial vehicle tracking, and Alert & Assist, for lone worker safety. Contigo's revenues are approximately $5.0 million annually, of which greater than 90% is recurring.
"Contigo brings to Vecima over 15,000 subscribers, channel strength, and a nimble development team with deep understanding of the telematics space. The addition of Contigo is complementary to our own FleetLynx business in terms of both geographic focus and target fleets adding significant presence in the service fleet vertical to Vecima's commercial trucking customer base. Not only is this acquisition immediately accretive, but by combining our businesses, we expect further synergies which should add to our overall EBITDA over time," said Sumit Kumar, Vecima's President and CEO.
"My team and I are excited to be joining forces with Vecima, a company with a proven track record of technology leadership. Our combined subscriber base, human resource pool, and financial strength will position Contigo's platform for growth in the telematics market," said Lindsay Ryerson, President and CEO of Contigo.
"We are very excited to acquire this strongly performing company which will boost the telematics component of our business," added Mr. Kumar. "Vecima has great respect for the team at Contigo and the quality of the business they have built. Mr. Ryerson will join Vecima as Vice President and General Manager of the combined fleet business. We look forward to the addition of Lindsay and his team and backing them with the support of Vecima's resources to grow the business going forward."
About Vecima Networks
Vecima Networks Inc. (TSX: VCM) designs, manufactures and sells products that enable broadband access to cable, wireless and telephony networks. Vecima's hardware products incorporate original embedded software to meet the complex requirements of next-generation, high-speed digital networks. Service providers use Vecima's solutions to deliver services to a converging worldwide broadband market, including what are commonly known as "triple play" (voice, video and data) and "quadruple play" (voice, video, data and wireless) services. Vecima's solutions allow service providers to rapidly and cost-effectively bridge the final network segment that connects the system directly to end users, commonly referred to as "the last mile", by overcoming the bottleneck resulting from insufficient carrying capacity in legacy, last mile infrastructures. Vecima's products are directed at two principal markets: Converged Wired Solutions and Broadband Wireless. More information is available at our website at www.vecima.com.
Contigo's patented location-based platform enables businesses to monitor their vehicles, assets and personnel 24/7 via the internet. Contigo's solutions are distributed across the U.S. and Canada through Contigo's network of strategic partners and value-added resellers. Founded in 2002, Contigo is a privately held corporation based in Vancouver, British Columbia. For more information, please visit www.contigo.com.
This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information is generally identifiable by use of the words "believes", "may", "plans", "will", "anticipates", "intends", "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions. Forward-looking information in this news release includes statements about: not only is this acquisition immediately accretive, but by combining our businesses, we expect further synergies which should add to our overall EBITDA over time; our combined subscriber base, human resource pool, and financial strength will position Contigo's platform for growth in the telematics market; Contigo will boost the telematics component of our business; and Mr. Ryerson will join Vecima as Vice President and General Manager of the combined fleet business.
In connection with the forward-looking information contained in this news release, Vecima has made numerous assumptions, regarding, among other things: we are able to successfully integrate Contigo's business, products and technologies without substantial expenses, delays or other operational or financial problems; we can manage our business and our growth successfully; we are able to develop new products and enhance our existing products; we can expand our current distribution channels and can develop new distribution channels; we are not required to change our pricing models to compete successfully; our third-party suppliers and contract manufacturers upon which we rely continue to meet our needs; and, our intellectual property is not infringed upon. While Vecima considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause Vecima's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein; Known risk factors include, among others: failure to manage our business or our growth successfully may adversely affect our operating results; our success depends on our ability to develop new products and enhance our existing products; we are dependent on the expansion of our current distribution channels and the development of new distribution channels; if we are required to change our pricing models to compete successfully, our margins and operating results may be adversely affected; our reliance on third-party suppliers and contract manufacturers reduces our control over our performance; and, third parties may allege that we infringe on their intellectual property.
A more complete discussion of the risks and uncertainties facing Vecima is disclosed under the heading "Risk Factors" in the Company's Annual Information Form dated September 25, 2015, as well as the Company's continuous disclosure filings with Canadian securities regulatory authorities available at www.sedar.com. All forward-looking information herein is qualified in its entirety by this cautionary statement, and Vecima disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.