CalAmp announced its acquisition of Synovia Solutions, an Indianapolis-based provider of fleet-management services for K-12 schools and municipal governments, for approximately $50 million in cash.
In calendar 2018, Synovia posted more than $28 million in software-as-a-service (SaaS) recurring revenue, with double-digit growth and approximately 30% EBITDA. Combined with the recent acquisitions of LoJack Mexico and Tracker U.K., the Synovia acquisition is anticipated to boost CalAmp’s recurring revenue from SaaS services to more than $30 million per quarter by the second half of the current fiscal year, according to CalAmp.
“This acquisition accelerates CalAmp’s transformational journey to high-value subscription-based services and is expected to help drive margin expansion and be accretive to CalAmp’s consolidated adjusted EBITDA in the current fiscal year,” the company said in a news release.
Through Synovia, CalAmp expands its portfolio of fleet-management and vehicle-safety services to an additional 125,000 vehicles, and increases its consumer reach to a daily average of 300,000 student and parent users of Synovia’s Here Comes The Bus smartphone application, which has been downloaded more than 1 million times. The app features real-time alerts based on the bus location for pick-ups and drop-offs down to the minute, giving families the peace of mind knowing their children are in safe hands. At the 2019 Consumer Electronics Show, Here Comes The Bus received an IHS Markit Innovation Award in the Mobile Computing category.
“This acquisition brings high-value, low-churn subscribers that are expected to bolster our recurring revenue from software and services to more than 30% of consolidated revenue and expands our market reach within municipalities to accelerate our leadership in the global connected vehicle economy,” said Michael Burdiek, president and CEO of CalAmp. “We anticipate meaningful savings in cost of goods sold and see outstanding product synergies between Synovia’s fleet-management portfolio and our LoJack SureDrive connected-car service as well as CalAmp’s broader portfolio of enterprise SaaS applications.”