UK two-way radio solutions manufacturer Sepura is to acquire its Spanish rival Teltronic for €127.5m (£94.2m). Sepura is suspending its existing buyback programme and is funding the deal with £60.5m of new equity and loan facilities from Barclays, HSBC and Santander, according to a Daily Telegraph report.
The same report says Teltronic is understood to have been put up for sale by its private equity firm N+1 around a year ago and had caught the attention of Sepura’s chief executive Gordon Watling.
Watling was quoted as saying: “This is a highly complementary and transformational acquisition which will be immediately earnings enhancing. It brings together two of the market's growing players, to create a market leading digital Professional Mobile Radio company, with a broader offering and significantly enhanced capabilities."
"Teltronic's business will diversify our geographical reach, growing our footprint in Latin America and enhancing our existing presence in North America, specifically the US; expanding and diversifying our revenue streams accordingly.
"As the number and scale of digital radio networks around the world increases, we will have the breadth of portfolio and financial strength to compete for significant new contracts at a high level," said Watling.
Juan Ferro, the current CEO of Teltronic, will lead the enlarged systems and network business of Sepura, along with his senior team. Teltronic operates in over 50 countries and is particularly strong in Latin America, North America (where it operates under the PowerTrunk name) and the EMEA region.
Teltronic product range includes radio terminals and infrastructure for TETRA, P25, LTE and hybrid TETRA/LTE networks, along with CCTV, vehicular systems and some command and control solutions. Key sectors include public safety, transport industries, utilities and critical infrastructure in general.
The move will help Sepura, which has traditionally targeted the public safety sector in particular, to further penetrate the commercial market. It is also active in the transport, utilities, oil and gas, manufacturing and construction sectors.
The company has been seeking to widen its technology portfolio for the last few years to avoid being overly dependent on the public safety sector. Sepura expanded beyond TETRA technology by adding DMR (digital mobile radio) two-way radio technology to its range in November 2013.
Founded in 2002, Sepura originally concentrated on manufacturing TETRA two-way radio terminals. It acquired 3T, the Austrian supplier of TETRA infrastructure in 2012, which enabled it to provide a full TETRA solution. It then bought Portalify, the Helsinki based applications developer, in July 2013, followed by Fylde Micro Ltd, the UK-based radio trunking solutions company, in 2014.
In April 2015, Sepura was awarded the Queen's Award for International Trade, the most prestigious business accolade in the UK.