Acquisition Highlights
The Board of Directors of Ubisense believe that the Acquisition will:
- Provide Ubisense with enhanced geographic reach into the Asian market
- Present opportunities to develop RTLI services business by deploying products and services to utility, telecoms and manufacturing companies in Asia
- Provide local exposure and proximity to Japanese and Korean manufacturers
- Afford cross-selling opportunities into an expanded customer base in Asia
- Enhance Ubisense’s product and services offering, particularly in relation to mobile
- applications
- Strengthen and develop Ubisense’s existing commercial relationships with customers such
- as Daifuku and the recently announced Asian headquartered automotive logistics group
- Accelerate Ubisense’s current business activities and new customer wins
- Be break-even at the profit before tax level in the year ended 31 December 2014 and
- earnings enhancing in the year ended 31 December 2015
Commenting on the Acquisition, Richard Green, Chief Executive Officer of Ubisense, said: “The acquisition of Interworks represents a significant step forward for the Company. We have long recognised Asia, and Japan and Korea in particular, as a huge market for our products and the acquisition will allow us to develop the market significantly from the initial base we have established with leading companies such as Mitsubishi, Hyundai, Honda and BMW Cherry.”
Overview of Interworks
Headquartered in Tokyo, Japan, Interworks provides location and infrastructure management solutions, delivering products and services to customers in the telecoms, water supply, gas, electricity and manufacturing sectors. Its Japanese operations were established in 1997 and in recent years it has expanded into Korea and the Philippines.
Interworks’ Chief Executive Officer, Tsunehiko Nishizawa, will remain within the enlarged group as CEO of the Asian operations.
Rationale for the Acquisition
The Directors believe that there is strong strategic rationale for the Acquisition as it provides the Company with a direct presence in Asia, one of its key growing markets. This is particularly important given forthcoming changes to Japanese radio regulations which will allow the sale of Ubisense products in the Japanese market from 2014. Ubisense and Interworks have already worked together, with Interworks completing the Hyundai installation in Korea. The Acquisition will enable Ubisense to develop and strengthen its existing strategic relationships with original equipment manufacturers (“OEMs”) such as Daifuku, and the recently announced Asian headquartered automotive logistics group as well as target new customers, in particular Japanese and Korean manufacturing companies.
Furthermore, the Acquisition affords opportunities to cross-sell Ubisense’s existing products and services, as well as to provide implementation and support to the enlarged group’s customer base such as BMW Cherry, Hyundai and KEPCO. The addition of Interworks’ customer relationships is expected to create new areas of growth for the enlarged group as well as enhance existing client relationships. There is also the additional opportunity to augment Ubisense’s product offering within its existing client relationships through the availability of specific Interworks product applications.
The Acquisition provides diversification benefits to Ubisense by improving the Company’s revenue mix in terms of exposure to sectors, geographic distribution and software applications. The Acquisition provides Ubisense with a strong presence in Asia and a complementary product offering, from which the enlarged group can accelerate its current business activities in this region.
The Acquisition is expected to be break-even at the profit before tax level in the year ended 31 December 2014 and be earnings enhancing for the year ended 31 December 2015.
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