TCM.L Share News (TCM)

(ShareCast News) - Internet-of-things company Telit Communications confirmed on Wednesday that it has agreed to acquire GainSpan Corporation for $8m in cash, subject to certain working capital adjustments.The AIM-traded firm said GainSpan designs, develops, manufactures and commercialises ultra-low power Wi-Fi systems-on-chip and modules for battery and line-powered devices.It also owns the intellectual property in network stacks, system and application software it has developed.The acquisition augments Telit's existing portfolio of IoT products and services, the board claimed, and positions the Group to deliver on its 'sensor-to-cloud' vision.Telit's board said the acquisition of GainSpan positions it to capitalise on new short range opportunities and the ubiquity of Wi-Fi by increasing sales to its existing customer base and capturing customers in many new segments.GainSpan's 96 employees, mostly in research and development and support, will be integrated into Telit's short-range business unit.The board said 60 are located in the R&D Centre in Bangalore, India with the rest in its San Jose, California headquarters.GainSpan is expected to have a negative impact on the adjusted EBITDA by some $4m in the current financial year.However, after fully integrating the business, Telit said it expects the asset to make a positive contribution in 2018 and to make both a material financial and operational contribution in the longer term."By adding ultra-low power Wi-Fi technology to our existing product portfolio, we will expand into new markets and segments, and bring further benefits to our existing customers," said Telit CEO Oozi Cats."This acquisition significantly expands our Wi-Fi competence and expertise and further strengthens and differentiates Telit as a top enabler of end-to-end IoT solutions."Cats said with the acquisition, Telit now has ten R&D centres around the world and a total workforce of more than 1,000 people."Importantly, GainSpan's R&D centre is in Bangalore - a key centre of R&D expertise, where we plan to expand our capabilities."