CalAmp Corp. (NASDAQ:CAMP), a leading provider of wireless products, services and solutions, and LoJack Corporation (NASDAQ: LOJN) (“LoJack”), a provider of vehicle theft recovery systems and advanced fleet management solutions, today announced that the companies have entered into a definitive agreement pursuant to which CalAmp will acquire all of the outstanding shares of common stock of LoJack for $6.45 per share in an all cash transaction valued at approximately $134 million.
This transaction, which has been unanimously approved by both companies’ Boards of Directors, will create a leader in connected car solutions and vehicle telematics applications. The combination builds on both companies’ complementary strengths and is expected to accelerate the broad adoption of vehicle telematics technologies and applications around the globe.
“The acquisition of LoJack aligns with our strategy to deliver innovative, next generation connected vehicle telematics technologies, thereby accelerating our roadmap in these large and fast growing markets, while creating value for our customers, partners and shareholders,” said Michael Burdiek, CalAmp’s President and Chief Executive Officer. “By combining with LoJack, we expect to enhance our ability to deliver novel connected vehicle telematics technologies and applications to our global customers. Moreover, we believe that LoJack’s considerable relationships, particularly in the U.S. auto dealer channel, as well as in the commercial space with heavy equipment providers and their international licensee footprint, will create new opportunities for growth and strengthen our competitive position. We are excited to welcome LoJack’s talented team to CalAmp and look forward to realizing the benefits that we expect this transaction to create.”
“This transaction delivers immediate and significant cash value to our shareholders at a substantial premium and represents a successful conclusion to the Board’s review of strategic alternatives to enhance shareholder value,” said Randy Ortiz, LoJack’s President and Chief Executive Officer. “We are proud that CalAmprecognizes LoJack’s success over the last 30 years in creating best-in-class theft recovery solutions and developing strong channel and end customer relationships around the world. With CalAmp as our partner, the LoJack brand will continue to expand beyond our foundational stolen vehicle recovery business by providing our customers and partners with enhanced product offerings to better protect and manage their assets. We look forward to working with the CalAmp team to ensure a smooth transition and accelerate the strategic initiatives already underway at LoJack as we take our great brand into the future.”
Anticipated Strategic and Financial Benefits of Transaction
- Creates market leader well-positioned to succeed through powerful combination of best-in-class products with broad market access: CalAmp’s leading portfolio of wireless connectivity devices, software, services and applications, combined with LoJack’s world renowned brand, proprietary stolen vehicle recovery product, unique law enforcement network and strong relationships with auto dealers, heavy equipment providers and global licensees, will create a market leader that is well-positioned to drive the broad adoption of connected car solutions and vehicle telematics technologies and applications worldwide.
- Provides customers and industry participants in target markets with exciting value proposition: The combined company will offer customers access to integrated, turnkey offerings that enable a multitude of high value applications encompassing vehicle security and enhanced driver safety. Furthermore, the combination of CalAmp’s and LoJack’s technology offerings is expected to provide global customers with connected vehicle applications to help ensure that retail auto dealers remain competitive and relevant in today’s rapidly evolving markets.
- Accretive transaction and updated business outlook: The transaction is expected to be highly accretive toCalAmp’s earnings in the first 12 months following consummation of the transaction. Based on the estimated timeframe for closing, CalAmp expects consolidated revenue to be in excess of $400 million for its fiscal year ending February 28, 2017, and for LoJack to contribute approximately $10 million in Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock compensation expense and acquisition-related expenses) and $0.15 to $0.25 in Non-GAAP earnings per share to CalAmp’s fiscal 2017 consolidated results. CalAmp’s Non-GAAP earnings per share exclude intangibles amortization, stock compensation expense, acquisition-related expenses, and non-cash income tax expense.
Closing and Approvals
Under the terms of the definitive agreement, a wholly-owned subsidiary of CalAmp will commence a tender offer to acquire all of the outstanding shares of LoJack common stock for $6.45 per share of LoJack common stock tendered. Following completion of the tender offer, the parties will effect a second-step merger pursuant to which all remaining shares of LoJack common stock not tendered in the offer will be converted into the right to receive the same cash price per share as in the offer. The transaction is expected to close during CalAmp’s fiscal 2017 first quarter, subject to customary closing conditions, including regulatory approvals and the tender of a number of LoJack shares that, together with other shares owned or to be acquired by CalAmp and its subsidiaries, represent at least two thirds of the total number of LoJack’s outstanding shares. CalAmp will fund the acquisition with existing cash on hand. (Original Source)
Shares of Calamp closed today at $16.91, down $0.09 or -0.53%. CAMP has a 1-year high of $21.82 and a 1-year low of $14.01. The stock’s 50-day moving average is $18.63 and its 200-day moving average is $18.01.
On the ratings front, Calamp has been the subject of a number of recent research reports. In a report issued on December 23, Canaccord Genuity analyst Michael Walkley maintained a Buy rating on CAMP, with a price target of $27, which represents a potential upside of 60.0% from where the stock is currently trading. Separately, on December 7, Chardan’s Marc Estigarribia initiated coverage with a Buy rating on the stock and has a price target of $24.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Walkley and Marc Estigarribia have a total average return of 12.1% and -10.9% respectively. Walkley has a success rate of 55.6% and is ranked #36 out of 3622 analysts, while Estigarribia has a success rate of 0.0% and is ranked #3023.
CalAmp Corp provides wireless communications solutions applications to customers. Its business activities are organized into its Wireless DataCom and Satellite business segments.