The roll up of IoT connectivity providers continued today, as KORE announced plans to acquire Wyless (News - Alert) Group Holdings. The all-cash deal, for which the value was not disclosed, pairs two of the remaining M2M service providers and follows by just a month news that Cisco Systems (News - Alert) is buying Jasper Technologies for $1.4 billion.
KORE is 37 percent held by three of the original KORE partners, including CEO Alex Brisbourne, and 63 percent by private equity investment firm ABRY Partners. Wyless has more than 80 shareholders, with the largest single block held by a U.K.-based capital fund, and controlling interest by its cofounder and chairman.
(James Brehm of James Brehm & Associates LLC recently wrote in this IoT Evolution piece about how Wyless executives recently “decided to part ways with president and catalyst for sales, Dan McDuffie (News - Alert), and put themselves up on the open market. As a result, the focus at Wyless is now about tightening up the books and showing a strong EBIDTA position, so early investors can share in the rewards of the current acquisition frenzy.”)
Brisbourne tells us that his company and Wyless have a very similar history, having both started in the U.K. as M2M solutions providers in 2013, and both with strong teams. But, he says, Wyless is half the size of KORE in terms of revenue.
“We’re on our way to being a quarter of a billion-dollar player in this market,” Brisbourne says, adding that KORE needs more people who understand this business and how to develop it.
The combined company, he says, will have almost a third of its staff involved in product development. Wyless CEO Mike Coffey will become KORE’s COO. And the combined organization will announce the rest of the executive team within the next four weeks, Brisbourne says. The deal is expected to close early in the second quarter.
In addition to giving it access to more IoT people, the deal will provide KORE with global SIM technology that Wyless acquired a few years ago but hasn’t yet leveraged, access to more data center and network facilities, and the ability to deliver a more complete IoT solution in a broader geography, Brisbourne says. Wyless has operations in Brazil, the Netherlands, North America, and the U.K., and North America represents about half of the Wyless business while the rest comes from Europe and a bit from Latin America.
KORE has been doing acquisitions at a rate of about one a year for the last five years, Brisbourne says, and there are likely more to come. Additional acquisitions would most likely be in the analytics, application hosting and support, and/or data management arenas, he adds.