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DecisionPoint Adds Apex

Ken Nagy, CFA

DecisionPoint Systems, Inc. (DPSI)), an enterprise mobility and RFID systems integrator, reported that in an effort to expand its mobility and logistics opportunities, the Company acquired the Burlington, Ontario, Canada based supplier of wireless mobile work force solutions, Apex Systems Integrators Inc., (“Apex”).

The purchase price was $5.0 million in cash at closing. In addition, there is an earnout and bonus capped at an additional $8.5 million, which is dependent upon future performance through July 31, 2015.  The transaction is expected to be accretive to DecisionPoint’s fiscal year 2012 earnings by $0.15 per share on an annualized basis.

Servicing clients in the consumer packaged goods, retail, B2B and service sector, Apex has enjoyed an approximately 55 percent per annum growth over the past five years, growing normalized EBITDA from roughly CAD $0.5 million in 2007 to approximately CAD $1.8 million during the full year ended July 31, 2010.

The Company's APEXWare™ suite of products provides mobile productivity solutions in the areas of merchandizing, sales and delivery, field service, logistics and transportation, and warehouse management.

Furthermore, Apex’s software product set is anticipated to fit directly with DecisionPoint’s own retail, field force mobility, warehousing, logistics and transportation markets and to provide opportunities for cross selling by both companies’ teams.  
Likewise, the acquisition is projected to shift DecisionPoint’s revenue mix by approximately 500 basis points towards software and services and to improve the Company’s average gross margins by approximately 300 basis points.

With premium mobile data applications estimated to have generated carrier revenues of over $2.3 billion in 2008 and expected to grow at a CAGR of 35 percent or to as much as $10.3 billion in 2013, Apex’s strong presence in Canada enables DecisionPoint to fill out its North American geographic service presence in another important growing market as well as meet the Company’s requirements of quality of skills and dedication and commitment to sell and deliver the best possible mission critical solutions.  
 

Please visit scr.zacks.com to view a free copy of the full DPSI research report.

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