KVH Industries announced a small acquisition today. The acquisition was for $6.5M, for a company doing revenue of $2-3M. Although I think the potential return on this could be much higher.
KVH Industries and Virtek Communications AS today announced that they have entered into an agreement for KVH to acquire the software company. Virtek specializes in the development and deployment of software known as “middleware” that helps commercial fleets and vessel owners manage the data transmitted to and from their vessels over different satellite communications services, such as KVH’s own mini-VSAT Broadband(SM) or Inmarsat FleetBroadband.
The combination of the CommBox technology with the mini-VSAT Broadband service creates a versatile end-to-end solution for mariners with powerful integration capabilities that reduce total communication cost while maintaining high flexibility and improve ship-shore and shore-ship communication. We will also be able to provide easy control of least cost routing among multiple communication options, improve crew welfare and morale by offering private voice, e-mail and web browsing, and enable remote support for our customers’ IT departments. Together with the speed, reliability, and affordability of KVH’s mini-VSAT Broadband network, we are preparing to offer a versatile solution ideal for virtually any commercial or leisure mariner in need of satellite communications and broadband access.
The key part of this acquisition is the realization of the benefits of the mini-VSAT network. Once KVH gets a strong penetration into the shipping industry, KVH will be able to sell value-added services at costs substantially advantaged to competition. KVH is building a big moat and the value of their network will be realized in couple of years.