Orbcomm Bolsters Freight Telematics Business With Purchase of Blue Tree Systems
Orbcomm Inc. moved to fortify its global freight telematics service with the purchase of Blue Tree Systems Limited International, a company based in Galway, Ireland, but with extensive business in the United States, Germany and France.
Terms of the transaction were not disclosed.
Blue Tree provides transportation management for operators of refrigerated and dry van trucks and trailers with more than 300 customers in North America, Europe, the United Kingdom, Australia and New Zealand.
“Blue Tree is a strong strategic addition to Orbcomm’s broad transportation portfolio,” said Marc Eisenberg, CEO of Orbcomm in a statement released Oct. 2. “Combined with our acquisition of inthinc in June, Blue Tree enables Orbcomm to provide the most complete transportation solution offering covering nearly every asset class, from in-cab to fleet vehicles to refrigerated assets to dry vans, making us the clear leader in this space and in global industrial IoT.”
Like Blue Tree, inthinc, based in Salt Lake City, provided fleet management services along with driver safety monitoring that includes electronic logging systems to help firms comply with driver hours of service requirements. The U.S. will require most truck drivers to use such devices instead of paper log books beginning in December. Todd Follmer of inthinc now serves as senior vice president of fleet management for Orbcomm.
Charlie Cahill, founder and CEO of Blue Tree, said, “We believe the increased scale, resources, customer base and geographic profile that Orbcomm offers will support our rapid growth globally.”
Orbcomm is based in Rochelle Park, N.J., and its stock is traded on the Nasdaq National Market under the stock symbol ORBC.
Orbcomm reported net subscriber additions of 62,000 in the three months ended June 30, including inthinc, and now has 1.8 million billable subscriber communicators in service, a 12.5% increase compared with 1.6 million units at the end of the same period a year ago.
“Our sales pipeline looks promising,” Eisenberg said in reporting Orbcomm’s financial results for the second quarter of 2017 in which the company posted a net loss of $10.7 million, or 15 cents a share, on revenue of $60 million for the three months ended June 30. That compared with a net loss of $4.2 million, or 6 cents a share, on revenue of $50 million in the same period in 2016.
In February, J.B. Hunt Transport Services of Lowell, Ark., selected Orbcomm to track and monitor 90,000 intermodal containers and over-the-road trailers. And more recently, Orbcomm picked up contracts with JLG Industries, a unit of Oshkosh Corp., to track its fleet of aerial work platforms, and Tote Maritime to monitor refrigerated cargo containers moving between the U.S. mainland and Puerto Rico.
“Large deployments are progressing much quicker than expected,” added Robert Costantini, chief financial officer of Orbcomm. “Building and installing these new devices faster than planned has put pressure on margins for the quarter, but will also translate into recurring service revenues sooner than expected. We believe this will be beneficial in the long run.”
