WebTech expands reach into government vertical through Grey Island acquisition

Driven by the need to consolidate a fragmented telematics market and to diversify its customer base to a much larger degree, WebTech Wireless Inc. reached an agreement to acquire Grey Island Systems International Inc. last week. The purchase will vault the combined entity into the top 20 of telematics solutions providers in the world and secure its status as the number one provider in Canada. Both companies gain considerably in the deal, with Vancouver-based WebTech securing a much larger government business and Grey Island getting access to a network of international channel partners. Anwar Sukkarié, president and CEO of WebTech, spoke of the significance the acquisition, during a conference announcing the deal. “We have a highly competitive government vertical managed by Grey Island and fortified by the WebTech and the high-end Grey Island solution. So basically we now have a complete product portfolio for the government vertical,” he says. “We also have a diverse global customer base now with strong presence in US, Canada, Europe and the Middle East, and of course Grey Island can tap into all of that. It opens global markets for Grey Island products, provides government focused solutions to WebTech’s AT&T channel in the United States.” Since its inception, Grey Island has been focused primarily on the government vertical and has been able to forge relationships with some high-profile customers such as New York City, Toronto, Ottawa and Washington DC, as well as provincial governments in Ontario, Alberta, Manitoba and Nova Scotia. Owen Moore, co-founder and president of Grey Island, talked about the benefits the Toronto-based company will realize as a result of the acquisition, pointing to the much broader reach for its products as a result of the strong distribution channels that WebTech has established. “Webtech’s strong international presence will further diversify our customer base and cross selling through a broader internal sales team is also expected to drive sales and marketing initiatives,” he says. Both companies say the deal should serve as a warning to other telematics players in the market that this combined entity going to be a consolidator. “The Grey Island/WebTech transaction is a transformational event and sends a strong message to the industry and to the market,” Moore says. “The message is that an acquisition strategy has been initiated and Grey Island and WebTech are going to play a prominent role in the future of telematics. For Grey Island, it was important to be involved with WebTech as a first mover because of the benefits associated with being in the game early.” Of course, there will be financial benefits resulting from the transaction. Revenue will immediately flow to the topline for the combined entity as there is little overlap in revenue. The companies say the combined operations will generate substantial savings and won’t come at the expense of job losses. Manufacturing is one area where savings will be had with WebTech’s high-cost, low-volume runs and R&D prototyping operations being shifted to Grey Island’s production facility, which has more than enough capacity to take on those duties.

WebTech expands reach into government vertical through Grey Island acquisition

News | 08/13/2009 5:51 pm EDT

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