USA-based Orbcomm, a machine to machine (M2M) and Internet of things (IOT) solutions provider, has entered into a definitive agreement to acquire Skygistics.
South African-based Skygistics is a provider of advanced satellite and global system for mobile communication systems for the control and management of remote assets.
The transaction is expected to close in May 2016, subject to customary closing conditions.
Skygistics will add distribution for Orbcomm's products in the South African market and 22 other African nations.
According to Skygistics, the acquisition will help African organisations with greater direct access to leading-edge M2M and IOT technology.
According to research firm Markets and Markets, the market size of global M2M connections is expected to reach $35.16 billion by 2020, at a compound growth rate of 11.57% between 2015 and 2020.
Skygistics chairman Kevin Eborall says the acquisition will bolster the company's technological capabilities, while enabling Orbcomm to expand its geographic footprint in the rapidly evolving African M2M and IOT markets.
Africa's leading M2M business coming under the umbrella of a world's leading M2M business is a positive step forward for the industry, adds Eborall.
Also, the Orbcomm suite of products is complementary to the existing Skygistics offerings, which will continue to be marketed and supported, he notes.
Skygistics CEO Neil Hattingh points out that this transaction reflects well on the company's proven capabilities.
"The fact that a well-respected global market leader has shown its confidence in our technology and people is a testament to the talent and quality that we have worked so hard to achieve at Skygistics. By working closely together, we can take this new venture to higher growth levels."
One of the major technological benefits of the transaction is the fact that the Skygistics client and distributor base now has access to the Orbcomm portfolio of products and services operating across GSM, geosynchronous satellite and the ORBCOMM satellite network, says Skygistics.
Africa poses its own unique set of challenges, and Skygistics has succeeded in this environment for the past 16 years, it adds.
With continued infrastructural growth and a vast landmass, the market potential for satellite and GSM-based communication technology in Africa is extremely large, says Eborall.
"We know local conditions better than anyone else, and the proof is in our historic success. As a result, after-sales and technical support will be available around the clock on existing and new technologies."
Orbcomm CEO Marc Eisenberg says the acquisition of Skygistics supports Orbcomm's long-term strategy of becoming a leading global, full-service provider in the Internet of things.
Incremental products and services to Skygistics' infrastructure will build a stronger presence on the African continent, which is an important growing market, he adds.
"We expect to more fully meet our customers' requirements and vastly grow the business through the distribution of industry-leading transportation, heavy equipment and a host of other solutions and services in this underserved region.
"The strength of the Orbcomm brand combined with Skygistics' regional footprint and technology make this transaction a great fit."
Skygistics has more than 40 employees with an established sales and distribution network throughout Africa.
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