Wireless communications giant Qualcomm is selling its Omnitracs trucking communications and telematics business for $800 million to Vista Equity Partners, a U.S.-based private equity firm.
The sale marks the exit of Qualcomm from the business that first got it rolling in the 1980s — connecting truck drivers on the road with managers and dispatchers at terminals and offices.
Vista will purchase all of Omnitracs’ North American and Latin American operations, including Selectys and Fleet RiskAdvisors, companies Qualcomm's Omnitracs unit acquired in 2011.
Qualcomm, a $19 billion company founded in 1985, launched OmniTracs, the first satellite-based truck tracking and communications system, in 1988, landing a contract with Schneider National.
In 2003, Schneider and Qualcomm pioneered trailer tracking technology, and this July the companies announced Schneider would install Omnitracs tracking units on all its intermodal containers.
Since 1988, Qualcomm has shipped more than 1.5 million OmniTracs units to 10,000 customers, according to the company's website. Qualcomm also pioneered wireless communications technologies, starting with CDMA in the 1980s.
Today Qualcomm’s global wireless technology business is much bigger than Omnitracs. Qualcomm’s Wireless and Internet division, which includes Omnitracs, reported $633 million in revenue in its last fiscal year and increased revenue only 1 percent from the year before. The other major business segments totaled $18.5 billion in revenue and grew much more rapidly.
Vista, a private equity firm with $7 billion in capital commitments, specializes in software and technology companies, including Atlanta-based supply chain software supplier Aptean.
“We are long-term investors in enterprise software, data and technology-enabled businesses that are committed to being leaders in their fields,” Robert Smith, Vista CEO, said in a statement.
“We are impressed with the compelling value proposition Omnitracs’ products and services offer their customers. We look forward to working with them and helping them to reach their full potential.”
Omnitracs may not be growing as quickly as Qualcomm's other businesses, but the company is likely to get a significant boost from a federal law requiring truckers to use electronic logging devices.
Last year's transportation spending law included a provision mandating use of ELDs, also called electronic onboard computers, within two years of the publication of new ELD regulations.
The Federal Motor Carrier Safety Administration is expected to propose the rules this year, and the mandate could be in place by 2015, giving Omnitracs and competitors an expanded market.