Technology solutions provider CalAmp announced that its acquisition of Synovia Solutions expands its fleet management and vehicle safety portfolio, and also increases recurring revenue from software as a service (SaaS).
CalAmp said on Monday that the deal is worth approximately $50 million in cash. CalAmp also recently acquired LoJack Mexico and Tracker U.K.
CalAmp now reaches an additional 125,000-plus 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. The app has used CalAmp telematics since 2003 to deliver real-time alerts that are based on school bus location for pick-ups and drop-offs, down to the minute.
The app recently won an innovation award in mobile computing from HIS Markit at the 2019 Consumer Electronics Show in Las Vegas. It is in use at 10 of the top 25 school districts in the U.S. and Canada, and it has been downloaded over 1 million times.
The acquisition also means Synovia Solutions can access CalAmp’s full telematics and solutions, including CrashBoxx, which provides crash alerts and accident reconstruction, as well as SCiOn Command, for supply chain availability and the LoJack SureDrive connect car app.
“CalAmp has been our go-to telematics technology partner over the years and we share a vision to combine their market-leading connected vehicle and visibility technologies with our municipality and government K-12 fleet management expertise, to scale the business and increase market penetration,” said Jon King, president and CEO of Synovia Solutions. “The product synergies between our companies open up exciting opportunities to develop new innovations that help students transition to safe teen drivers, and deliver greater visibility into fleet operations for administrators and fleet managers.”
Last year, Synovia Solutions posted over $28 million in SaaS revenue, along with double-digit growth and approximately 30 percent EBITDA. CalAmp added that it expects its SaaS revenue to increase to over $30 million a quarter by the second half of the current fiscal year.
CalAmp added that the acquisition is expected to help drive margin expansion for the Irvine, California-based company and be accretive to CalAmp’s consolidated adjusted EBITDA in the current fiscal year.
“This acquisition brings high-value, low-churn subscribers that are expected to bolster our recurring revenue from software and services to more than 30 percent 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.
He added that “We anticipate meaningful savings in the 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.”
Bill Westerman, vice president of sales and marketing for Synovia Solutions, told School Transportation News that customers can expect business as usual. The Synovia Solutions and “Here Comes The Bus” brands live on.
“This acquisition positions Synovia to accomplish two essential goals: Better serve our current customers and expand with greater momentum into our focus on the municipal government industry,” added King in a statement. “Our history of delivering game-changing software and outstanding customer service, matched with CalAmp’s authority and reach across the telematics industry, makes us bullish on the future of our combined innovations and shared destiny.”
Synovia Solutions was formed after a 2012 merger with Everyday Solutions, a decade after originating as Synovia, Inc. Since then, Synovia Solutions has grown via partnerships with Verizon Wireless and Blue Bird to provide a factory GPS solution.