JVCKENWOOD buys 40% stake in Tait Communications
New Zealand-based Tait Foundation yesterday announced that it has sold a 40% share of LMR manufacturer Tait Communications to Japan-based JVCKENWOOD, which announced in August its plans to purchase a stake in the Tait company.
“The deal is complete,” Tait Communications CEO Garry Diack said during an interview with IWCE’s Urgent Communications. “The money’s in the bank, and we’re … looking at how we’re going to spend it, which is good.
“We’ll use this money to continue the expenditure that we’re putting into research and development around convergence technologies—moving from the LMR into the converged space, with broadband and LTE-type technologies. We think we’ve got a product and solutions portfolio that the market will respect and be quite excited about. “With our mobile unified-communications capabilities, as we bring that to market and continue to evolve it, that’s really where we’re going to use a lot of this investment capital.”
A Tait press release states that JVCKENWOOD purchased a “minority share” in Tait International, is known in the market as Tait Communication, according to a company spokesperson. Diack confirmed that the JVCKENWOOD shares represent a 40% stake in Tait Communications.
“At this point in time, this is strictly a financial investment that JVCKENWOOD has made,” Diack said. “There’s no plans to do anything more at this point in time,” noting that Tait officials continue to be pleased with the company’s distribution partnership with Harris in North America
Diack declined to disclose the amount of money JVCKENWOOD invested in Tait Communications but said “we are pretty happy with the valuation” associated with the deal. In May, Diack told IWCE’s Urgent Communications that the company would seek about $20 million in outside to pursue new growth opportunities.
JVCKENWOOD’s investment represents the first deal in the history of Tait Communications, which was founded in 1969 by Sir Angus Tait. In the spring, Tait Communications announced plans to alter the company’s governance from a trust structure to a commission structure, so it could accept outside funding to finance important research-and-development work to better position the company for the future market.
Completing the JVCKENWOOD deal is a big step for Tait Communications, which has been in need for “growth capital,” Diack said.
“The rapid change in the market means that we, in our own resources, probably never had enough access to the right amount of capital for us to continue to be the type of business we need to be—funding growth is quite difficult in our business,” he said.
“We looked at a variety of sources of capital and have settled on trade capital. Private equity and those sorts of things never had the synergies that we wanted to get, in terms of the long-term partners that we needed. A source of trade capital from an investor like JVCKENWOOD has been really good.”
Tait Communications plans to concentrate its efforts more on mobile communications within vehicles than on handset-based solutions, Diack said. The new development efforts will be focused on LMR-broadband convergence technologies serving four main vertical markets—mining, public transportation, utilities and public safety.
“I think what this does is it takes us into the world of applications on top of the technology and building the applications suite by market verticals,” Diack said.
“Each one of those verticals will develop its own applications, in terms of how customers and clients get more effective in their mobile communications. Those application suites will reflect those markets. Being able to invest more and more in how the technology leads to better communication on top of that platform is really where we want to see some of this investment money go.”
Diack said he does not anticipate Tait Communications pursuing other financial investments in the foreseeable future but stressed that company officials are always looking for potentially beneficial partnerships.
“We’re a relatively small player in the market,” Diack said. “The strategy that we’ve got is we can only remain relevant and key if we have good partnerships. We have a partnership with Harris, an investment partnership with JVCKENWOOD, and we continue to look for and build partnerships all around the globe to allow us to meet our customers’ needs as effectively as we can.
“Other industries that I’ve been in that have seen major change—the digitization of analog product, news media—business partnerships become the solution for medium-sized players, and this industry seems to be going down the same track. That makes it very exciting.”