Wireless technology provider Novatel Wireless (Nasdaq: MIFI) has acquired Feeney Wireless for $25 million in a cash and stock deal.
Eugene, Oregon-based Feeney Wireless makes Internet of Things products, which have technology that allows them to communicate with each other, including mobile gateways and power distribution parts. The company also provides related software.
San Diego-based Novatel designs and develops machine-to-machine wireless services that use 3G and 4G technology. The company's products include mobile hotspots, USB modems, mobile-tracking services and asset-tracking services. Novatel says the acquisition helps it to grow in the Internet of Things space, where it can provide hardware and software-as-a-service.
"Novatel has been exceptional at taking a piece of silicon and making it into a product, but we never got to actually build and deploy services to customers," says Novatel CEO Alex Mashinsky. "What's happening right now is that you have this explosion of IoT devices that are being interconneted to the network, and it requires a different type of implementation. Most customers are requiring end-to-end implementation," says Mashinsky.
Mashinsky, who has led the company through a turnaround, refocused Novatel on the Internet of Things. On March 20 the company announced its first quarterly profit after 16 straight quarterly losses.
"It's not enough to just have a box or just have a piece of software to work with the box," Mashinsky says. The company plans to make three acquisitions this year he says.
The purchase includes the option for an additional $25 million in earn-out payments over the next four years depending on Feeney Wireless' performance.
The transaction follows another Internet of Things buy from Microsemi, which bought chip maker Vitesse Semiconductor earlier in March.