News
Digi Acquires European Wireless Router Leader Sarian Systems
May 2008 by Marc Jacob
Digi International® Inc. announced the acquisition of Sarian Systems, Limited. a privately held U.K. based corporation and a leader in the European wireless router market. The acquisition is a cash transaction for approximately $30.5 million for all the outstanding ordinary shares of Sarian. The purchase price of $30.5 million takes into account cash on Sarian’s balance sheet as of the acquisition date, estimated to be $2.5 million.
Sarian Systems designs, develops and manufactures advanced wireless/cellular IP Routing equipment for mission critical applications. Having developed its own comprehensive IP operating system and software, Sarian delivers customers technical excellence, flexibility and rapid customisation. With a vertical market focus and deep protocol knowledge, Sarian has developed a strong customer base in ATM connectivity; retail and payment systems connectivity; remote monitoring or telemetry; lottery terminal connectivity; and wireless backup of wired broadband connections. This vertical focus is highly complementary to Digi’s market approach.
Digi expects Sarian to contribute in excess of $2.5 million in revenue for the third fiscal quarter of 2008, from date of acquisition, and in a range of approximately $3.5 to $5.5 million in revenue for the fourth fiscal quarter of 2008. Digi anticipates Sarian will contribute revenue in a range of $23 million to $27 million for fiscal year 2009.
Digi anticipates that in-process research and development and other acquisition-related expenses will reduce earnings per diluted share by $0.08 to $0.10 for the third fiscal quarter of 2008. Digi expects the Sarian acquisition will be $0.06 to $0.08 accretive per diluted share for fiscal 2009, and that Sarian earnings per diluted share will be breakeven or slightly accretive beginning in the fourth quarter of fiscal 2008.
Pursuant to the terms of the share purchase, Sarian became a wholly owned subsidiary of Digi International Ltd., located in the United Kingdom, a second tier subsidiary of Digi International Inc. Digi will retain the Sarian office in Ilkley, West Yorkshire, England.
