|Home||Internet of Things||Aerospace||Apparel||Energy||Defense||Health Care||Logistics||Manufacturing||Retail|
RFID Printer Maker Zebra Makes Two Acquisitions
RFID printer manufacturer Zebra has agreed to pay $145 million for Navis, a logistics solutions provider to marine terminals and other operations managing supply chain cargo. Zebra also announced the $16.3 million acquisition of all outstanding shares of proveo, an RTLS company that serves the airport ground-handling operations.
Oct 17, 2007—This article was originally published by RFID Update.
October 17, 2007—RFID printer manufacturer Zebra Technologies yesterday announced two aquisitions, the first of logistics solutions provider Navis for $145 million, the second of niche RTLS company proveo for $16.3 million. The acquisitions represent further diversification away from Zebra's core printer business, a strategy initiated earlier this year when the company purchased RTLS firm WhereNet for $126 million (see Zebra Acquires Active RFID Provider WhereNet).
Navis is based in Oakland, California, and provides logistics solutions for marine terminals and other operations that manage supply chain inventory and cargo. Founded in 1988, the company has installations at over 450 customer sites in 50 countries, and projects $60 million in revenue this year. Its products and services range from port operating systems to yard management to warehouse management systems (WMS) to asset visibility.
Germany's proveo develops GPS- and WiFi-based RTLS solutions for airport ground handlers. Among the airports where it has installations are Frankfurt, Munich, London, Singapore, and Dubai. While a much smaller acquisition, Zebra indicated that the market opportunity for proveo is compelling. "The company offers significant long-term growth opportunities in the deployment of automatic identification technologies for more effective [ground support equipment] management to the more than 350 large and mid-sized airports around the world that operate a fleet of approximately 200,000 motorized vehicles."
Separately, proveo had an investor in RFID Invest AG, a Liechtenstein-based firm focused specifically on RFID-related opportunities (see Investment Firm Focuses on RFID.)
Neither Navis nor proveo is an obvious complement to Zebra's bread-and-butter -- manufacturing and selling printers -- but they certainly do complement the WhereNet business. Thus the acquisition of the two companies demonstrates that the WhereNet play was not simply a one-off; Zebra appears to see high-value, high-service visibility solutions as a key area of growth over the long term.
Kevin Starke, a senior equity analyst at Weeden & Co., told RFID Update that providing end-to-end solutions to institutions like terminals and airports can be quite lucrative. "If Zebra can come into a marine terminal or airport and offer a ready-made solution, they could be adding a lot of value to the customer and getting paid well for it." In Navis, Starke also noted the purely financial attraction: the company's software solutions generate recurring maintenance revenues which could help smooth out Zebra's own bumpy and cyclical revenue collection patterns.
Chris Quilty of investment firm Raymond James expressed concern that the "divergent nature" of the acquisitions could result in integration challenges, both logistically and culturally, especially given the absense of client overlap.
That point begs the larger question of why Zebra is entering "divergent" businesses in the first place. One suggestion is that it believes the printer business could contract over the long term, thanks to any number of factors. "That business is beginning to enter a period of long-term decline," affirmed Starke. Assuming Zebra shares that view, the spate of acquistions suggests the company is positioning itself for a future beyond printers.
On the one hand, it is encouraging to see Zebra management boldly and proactively affect a new growth trajectory. On the other, the uncertainty inherent to executing such a strategy can be unsettling. "The acquisitions send a clear signal that Zebra's new management team is willing to take a more open and aggressive view of Zebra's role within the AIDC (automatic identification and data capture) and logistics markets," wrote Quilty. "Where this path might lead is open to question, but if the Zebra team can effectively use its acquisition strategy to re-cast its business and financial metrics, the stock could become a much more alluring growth platform in the years to come."
Read the announcement from Zebra
Login and post your comment!
Not a member?
Signup for an account now to access all of the features of RFIDJournal.com!
SEND IT YOUR WAY
RFID JOURNAL EVENTS
ASK THE EXPERTS
Simply enter a question for our experts.
TAKE THE POLL
|RFID Journal LIVE!||RFID in Health Care||LIVE! LatAm||LIVE! Brasil||LIVE! Europe||RFID Connect||Virtual Events||RFID Journal Awards||Webinars||Presentations|