CalAmp Corp.’s latest acquisition strengthens the company’s long-running diversification strategy crafted by Chief Executive Michael Burdiek.
The $134 million buy of LoJack Corp. in Canton, Mass., adds a strong distribution network and brand in the used car dealership market, plus vehicle theft recovery systems production and fleet telematics.
“It’s basically a channel application effort and very strategic for us,” said Burdiek, a Laguna Beach resident with a 30-year track record in the wireless communications industry.
The transaction, expected to close by April, will grow Oxnard-based CalAmp’s top line by more than 50% and add $5.4 million to $9.1 million in adjusted profits. LoJack has about 550 employees.
CalAmp, whose top executive and several other corporate personnel are based in Irvine, has increased revenue at a 22% annual clip since 2011 through the expansion of Internet of Things and software service offerings. The company posted sales of $250.6 million in the 12 months through February 2015, the end of its fiscal year.
It has more 490,000 software subscribers and a network of 5 million devices in the field that are used in applications such as stolen vehicle and asset recovery, fleet management, first responder public safety communication networks, smart grid, and driver insurance premiums.
CalAmp’s competitors include Motorola, Xirgo, Sierra Wireless and Fleetmatics, among others.
It employs about 450, with 50 in Irvine, where its IT, human relations, legal and some supply chain operations are based. Some 85 workers are in Carlsbad, home to the mobile resources management business, which generates about half of the company’s annual revenue through manufacturing and selling telematics devices for car dealerships, law enforcement agencies and commercial fleets, among others.
“Most of the growth is in Orange and San Diego counties,” said Burdiek, who was hired in 2007 to lead CalAmp’s wireless datacom business and to integrate several small acquisitions.
The company at the time specialized in making satellite dishes for the residential and commercial markets. Its dominant customers were Echostar, the parent of Dish Network, and DirecTV.
A few months after Burdiek took the post, CalAmp issued a massive recall of equipment sold to Echostar due to faulty printed circuit boards that caused performance to deteriorate under some environmental conditions.
Faulty material provided by a CalAmp supplier was determined to be the cause of the problem.
Revenue plummeted from a peak of about $220 million, as Echostar and DirecTV accounted for about 75% of sales at the time.
“It almost put us out of business,” Burdiek said. “It was a crisis, but we were able to get through that.”
Echostar remains the company’s top customer, though the maturing satellite business accounts for only about 13% of revenue today.
CalAmp was founded in 1981 and began trading on the NASDAQ in 1983, holding the distinction as one of the oldest stocks on the tech-heavy exchange. It established an Irvine office in 2007 through its $19 million acquisition of Aercept.
