GlobalTrak and MobileNet are expected to make valuable contributions to Orbcomm’s portfolio, including: run rate revenues of between $5 million and $7 million; significantly higher ARPUs; more than 4,000 net subscriptions; and an expanded presence in the heavy equipment, rail, and government sectors. 

   Orbcomm CEO Marc Eisenberg said the acquisitions support his company’s growth strategy of expanding its end-to-end solutions portfolio into key vertical markets and new geographic regions, as GlobalTrak sells into key markets such as the government sector and operates in the Middle East, Asia and South America.

   “The addition of GlobalTrak’s advanced asset monitoring solution and its top-tier customer base adds to our diverse technologies and expertise serving the transportation market,” Eisenberg said in a statement. “It is an important next step in the evolution of our business as an end-to-end solutions provider, and brings with it significant differentiated technology solutions, such as container tracking, as well as new and important distribution channels.”

   Commenting on the MobileNet acquisition, Eisenberg added that leveraging its turnkey offering would provide Orbcomm customers with significant operating advantages, as well as savings in development costs and faster time to market for implementing telematics solutions in the field.

   “With MobileNet’s strong customer base and proven success as a solutions provider in this market, we believe the MobileNet product offering fits perfectly within our strategic initiative of strengthening our end-to-end solutions capabilities in key areas,” said Eisenberg.

   News of the acquisitions came alongside Orbcomm’s fourth quarter 2012 fiscal report, which included a 51 percent year-over-year increase in adjusted EBITDA to $4.2 million and company record operating cash flows of $5.1 million. Revenues increased 18.5 percent from the same period in 2011 to $16.2 million.

   Orbcomm’s net subscriber additions, however, were relatively weak compared to analysts’ projections. The company added 15,000 subscribers during the fourth quarter – well short of the market’s 29,000 net addition forecast, representing the company’s weakest total in seven quarters. 

   Raymond James Analyst Chris Quilty is wary of Orbcomm management’s expectations for sequential improvement in the first quarter of 2013, aided by its two newly acquired assets.

   “Despite incremental contribution from GlobalTrak and MobileNet, we are holding our estimates largely unchanged due to the possibility that customers may delay orders while awaiting the availability of OG2 hardware and services planned for a September launch,” Quilty said in a research statement to SatelliteTODAY, adding that a successful launch should contribute to higher subscriber growth, ARPUs, and service revenues in 2014. “Although shares of ORBC have rallied approximately 60 percent since late-November, we believe stock has more room to run, buoyed by the launch of new OG2 satellites, recent accretive acquisitions and high operating leverage.”