Telit Communications (AIM:TCM.L), which belongs to the Polar Communications (TASE: PLRC) group, has bought 75% of a South Korean company called Bellwave m2m Co.
Telit has agreed to pay $6.2 million cash for the shares and has an option to buy the outstanding 25% for $2 million more. The option remains in force until December 2006.
Telit says the deal should close in June 2006, subject to the requisite approvals.
Bellwave is the machine-to-machine (?m2m?) division of Bellwave Co, a South Korean wireless communications developer.
Bellwave?s m2m business generated $21 million revenue in 2005 and controls almost 50% of the South Korean market, the companies say.
Bellwave m2m, which developed and marketed the world?s smallest CDMA data communications module, has 40 employees, most of whom are engineers, the firm says.
The company will focus on the development of CDMA 1X and EVDO products for Asian and American markets and the development of WCDMA/UMTS products for global distribution. It will also market CDMA and GSM/GPRS product lines for Telit in Asia Pacific.
Commenting on the acquisition, Oozi Cats, the CEO of tive of Telit Communications, said, "The combination of Telit?s and Bellwaves? experience will create a new force in the m2m market, capable of servicing all CDMA and GSM and in the future also WCDMA markets on a global basis."
Telit recently received a 11.4 million euro grant from the Italian industry ministry to set up a new R&D center there. The company means to use the center to develop its m2m offering further.
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