KORE uses new ABRY funding to acquire RacoWireless and boost global M2M adoption
Atlanta, Boston & Cincinatti, USA. November 11, 2014 – KORE Wireless Group, Inc., a global provider of managed M2M communications services, today announced that ABRY Partners, a North America private equity investment firm, has acquired a majority interest in KORE. As the first step in its broader strategy, KORE also announced the acquisition of RacoWireless.
KORE is said to be the world’s largest wireless network provider specialising exclusively in the rapidly expanding global M2M communications market. Operating under the KORE Telematics brand in the USA, and providing solutions to enterprises and operators under the KORE Systems brand, KORE provides unified control and management for cellular and satellite network service delivery in more than 180 countries worldwide.
RacoWireless provides end-to-end connectivity solutions for Internet of Things (IoT) and machine -to-machine communications (M2M). Following the completion of this all-cash transaction, the combined company will have offices in five countries and serve more than three million subscribers on behalf of over 1,500 customers using services in more than 110 markets around the world. The acquisition is subject to completion of certain regulatory and other consents, and is expected to close in the fourth quarter of 2014.
The investment by ABRY of an as-yet undisclosed sum, aims to provide growth and acquisition capital in conjunction with its current partners. According to a KORE spokesperson, the company’s goal is to become “the pre-eminent independent provider of broad-based M2M service solutions on a global basis.” The combined organisation will deliver a portfolio of connected technology, location-aware solutions, and management tools.
“We are standing at a historic inflection point in our industry where scalability and innovation are critical, and the financial partnership with ABRY delivers the capital and expert support necessary to rapidly develop the scale demanded by global customers in what has so far been a fragmented market,” said Alex Brisbourne, CEO of KORE. “Strategic acquisitions both in advanced connectivity and richer applications solutions are an important goal, as scale and global reach are of paramount importance to our large applications and enterprise customers. These customers seek to leverage new M2M technologies that enable more efficient, innovative, and in some cases, disruptive business models going forward,” he said.
“We are delighted to move rapidly with this first step in our expansion strategy, and create further value for our customers and partners both nationally and globally, leveraging the integrated solutions that the company can deliver for their businesses,” Brisbourne added.
“This acquisition is a great fit between two companies that have been pioneers in this space,” said John Horn, president of Raco, who will become the executive vice-president and chief strategy officer. “This is a unique opportunity that will redefine the IoT/M2M industry, and create a company that has the right scale and focus to shape the course of the Internet of Things.”
The combined company’s increased scope and scale will, said KORE, provide its customers and partners with the benefits of a more diverse, global footprint and access to an award-winning set of development and management tools.
“We have been closely watching this industry as it starts to take off on a global scale,” said Blake Battaglia, partner at ABRY Partners. “Our commitment to investing in KORE as an engine for global growth is, we believe, an indication of the opportunity within this industry space, and we are excited to be a part of facilitating this first step in the inevitable consolidation to take place as the market moves from its current nascent state,” he said.
M2M rival for many mobile network operators
Robin Duke-Woolley, CEO of M2M analysts, Beecham Research said: “The combined business will rival many mobile network operator (MNO) M2M business units in terms of numbers of connections served. It is also clearly the start not the finish of a new growth phase for KORE.”
“The KORE-RACO deal will result in a combined business with an installed base of over 3 million M2M connections – in other words, more than many MNOs. It is certainly the case that ‘big customers want to deal with big suppliers’, so this deal will increase choice for large enterprise users – which in turn will aid overall market development and growth,” Duke-Woolley added.
KORE enables its application, hardware and wireless operator partners to deliver M2M solutions for connected devices across the globe. M2M applications in industries as diverse as healthcare, utilities, enterprise IT, transaction processing and fleet management use the KORE network with the goal of delivering operational efficiencies and cost savings. KORE offers a range of technologies, including GSM, HSPA, CDMA EV-DO and LTE, as well as satellite services.
RacoWireless is a provider of wireless data solutions to the M2M industry. The company can assemble a flexible, end-to-end M2M wireless connectivity solution for its partners — including delivering custom rate plans, tailored billing solutions and customised wireless connectivity as well as helping them brand their M2M applications and delivering 24/7 customer service.
Founded in 1989, ABRY Partners is a private equity investment firm focusing on media, communications, and business and information services. ABRY’s identifies and invests in rapidly growing areas of communications, IT infrastructure and managed services including M2M/IoT services, managed cloud and networking services, unified communications and other broadband-oriented services fulfilling the IT and communication needs of carriers, enterprises, and application service providers. Since its founding, ABRY has completed over US$42 billion of leveraged transactions and other private equity, mezzanine or preferred equity placements, representing investments in over 450 properties.