Portfolio Expanded with Solutions to Simplify Enterprise WAN Management with Largest Acquisition in Company History
Digi International, a leading global provider of Internet of Things (IoT) connectivity products and services, announced it has acquired Connecticut-based Ventus Holdings, a leader in Managed Network-as-a-Service (MNaaS) solutions that simplify the complexity of enterprise wide area network (WAN) connectivity.
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“Collectively, our world-class hardware and software solutions, network expertise, engineering talent, and exceptional client support will create significant value and innovation for enterprises around the world.”
The acquisition—the largest in Digi’s 36-year history—will enable the company to provide software and subscription service plans along with its award-winning hardware, thereby strengthening its position as a supplier of complete, high-value networking solutions.
In its 20 years of operations, Ventus has become an industry leader in innovative, secure, market-driven enterprise-class networks. Ventus’s portfolio includes cellular wireless and fixed line WAN solutions for an array of connectivity applications in banking, healthcare, retail, gaming, hospitality and other sectors.
Supporting ATMs, gaming, point-of-sale, kiosks, digital signage and retail applications, Ventus works closely with its leading customers to customize innovative MNaaS solutions. Ventus combines impeccable security, relentless uptime, and responsive expert support to help businesses streamline networking processes and boost IT resources.
Digi acquired Ventus for $347.4 million in cash, which is just over eight times annualized recurring revenues. To finance the purchase, Digi secured a $350 million debt facility through existing lender BMO Harris Bank N.A. and its affiliates. Stephens Inc. served as financial advisor to Digi on the acquisition and provided a fairness opinion. Faegre Drinker Biddle & Reath LLP served as legal counsel to Digi on both the acquisition and debt facility. Rothschild & Co served as financial advisor and Mayer Brown LLP served as legal counsel to Ventus on the acquisition.
Digi expects the acquisition to be immediately accretive to its non-GAAP measurements of adjusted EBITDA and adjusted EPS. Because of interest expense on the credit facility on a GAAP basis the acquisition is expected to be mildly non-accretive on net income and EPS in fiscal year 2023. Digi expects to report Ventus’ performance as part of its IoT Solutions segment.
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“Our primary goal is to simplify the deployment and management of sophisticated and distributed enterprise networks,” said Ron Konezny, President and CEO of Digi International. “Our acquisition of Ventus leverages our unique understanding of the evolving connectivity needs and challenges enterprises face today–from wide geographic footprints to large numbers of dynamic and intelligent endpoints. We’re proud to renew our commitment to reducing the complexities of network and endpoint connectivity, as well as simplifying the building, hosting deploying, monitoring, and maintenance of secure, disruption-free WAN networks.”
“Joining a trusted industry leader like Digi presents tremendous opportunities for our combined teams to collaborate on more innovative networking solutions,” says Steve Glaser, who will advance from COO of Ventus to the General Manager of Ventus under Digi’s ownership. “Collectively, our world-class hardware and software solutions, network expertise, engineering talent, and exceptional client support will create significant value and innovation for enterprises around the world.”
Digi will host an informational conference call about the acquisition on Nov. 2, 2021 at 4:00 p.m. Central time. Participants may access the live conference call through the investor relations section of Digi’s website, or by dialing (855) 638-5675 toll free (US) or +1 (262) 912-4765 (international) and entering conference ID 8989035.
A replay will be available for one week, within approximately three hours after the completion of the call. You may access the replay via webcast through the investor relations section of Digi’s website. Or you may access the replay by dialing (855) 859-2056 for domestic participants or (404) 537-3406 for international participants and entering access code 8989035 when prompted. A presentation about Ventus and the acquisition also can be found at the investor relations section of Digi’s website.