JVCKENWOOD announces plans to launch broadband unit, buy shares of Tait International

Japan-based JVCKENWOOD announced plans to launch a broadband solutions business and that it has entered into an agreement to acquire shares of Tait International, noting plans to have “a capital and business alliance” with the New Zealand-based manufacturer of communications devices and networks.

“In the professional digital radio solutions market, a major transition from narrowband to broadband networks is underway with advances in digital transformation,” according to a JVCKENWOOD press released that was issued on Wednesday. “Under these circumstances, we view the launch of the broadband solution business, as a new top priority business area to achieve medium- and long-term growth of the Communications Systems Business down the road.”

Purchasing shares of Tait International is part of this new strategy, according to the JVCKENWOOD press release.

“Tait International, with which JVCKENWOOD has concluded an agreement for a share acquisition and a capital and business alliance, is a pioneering company in commercializing LMR and broadband solutions, and it also has strengths in developing system integration solutions and software that address customers’ needs,” the JVCKENWOOD press release states. “By integrating the technologies, know-how, and sales channels of JVCKENWOOD and Tait International, we will work to rapidly launch and expand the broadband solution business.

“In addition, we can expect the share acquisition and the capital and business alliance to translate into reduced development and production costs in our existing business areas, as well as business expansion in Asia, Oceania, Brazil, and Russia by leveraging the sales channels of Tait International in those regions.”

JVCKENWOOD expects to buy shares of Tait International—an entity established earlier this year “with the aim of transferring all of the substantive businesses operated by Tait—in October, and the deal is expected to have only a “minor” effect on the business forecast of JVCKENWOOD, according to the JVCKENWOOD press release.

Representatives for JVCKENWOOD and Tait declined to provide any further comment on the matter to IWCE’s Urgent Communications.

There is no mention of the amount of money that JVCKENWOOD plans to invest in Tait International or how many shares it would acquire in the JVCKENWOOD press release. However, Tait Communications announced that it would alter the company’s governance from a trust structure to a commission structure, so it could seek about $20 million in outside capital to pursue new growth opportunities, Tait Communications CEO Garry Diack told IWCE’s Urgent Communications in May.

“Tait is a mid-sized business that has traditionally funded all of its development from its retained earnings and existing trust shareholders,” Diack said during an interview with IWCE’s Urgent Communications in May. “The new opportunities that we see coming at us across multiple market segments—public safety, utilities, mining, oil and gas, and transport particularly—it’s like they’re all going to come of age at once sometime in this next 5-8 year period, as people invest in platforms that can be upgraded into an LTE-type environment.

“That means that a development capability funded only out of retained earnings is not going to allow us to move fast enough, so we’re seeking additional capital than what we’ve traditionally had.”

Tait Communications officials plan to use any outside capital to help fund three strategies—internal solution development, partnerships with other companies, and targeted acquisitions, Diack said in May.

A company best known for manufacturing car and home electronics, JVCKENWOOD has been very active in making investments in the critical-communications space in recent years, purchasing 911 solutions provider Zetron, P25 manufacturer EF Johnson and DMR manufacturer Radio Activity during that time. In addition, JVCKENWOOD last year announced that it made a $10 million investment in Sonim Technologies, which makes ruggedized LTE devices that are designed for public-safety use.