California-based edge AI and IoT provider Lantronix has acquired Canadian firm Vecima Networks’ IoT and telematics business, including its Nero Global Tracking software-as-a-service platform.

The $11.5m acquisition will add a proven SaaS application layer to Lantronix’s edge hardware and connectivity portfolio, expanding its critical infrastructure monitoring vertical and accelerating its shift towards higher-margin, recurring-revenue IoT.

Nero Global Tracking brings an established North American customer base across the fleet, municipal, restoration and industrial asset-tracking markets, strengthening Lantronix’s ability to deliver integrations for customers managing mission-critical assets.

The transaction adds approximately $5.3m of total revenue, including $4.5m of annual recurring revenue and approximately 125,000 asset tags under management. It also brings a profitable SaaS business with gross margins in the high-60% range, increasing Lantronix’s mix of higher-margin, recurring revenue and bringing software and services to more than 10% of total company revenue.

This strengthens Lantronix’s full-stack value proposition by adding application-layer domain expertise that can be integrated with Lantronix hardware, connectivity, firmware and edge compute products. The aim is to combine Nero Global Tracking’s installed base with Lantronix’s broader IoT portfolio.

“This acquisition is consistent with our platform strategy and advances exactly where we are looking to take Lantronix: towards higher-margin, recurring-revenue that combines our edge hardware, connectivity and software capabilities,” said Saleel Awsare, CEO of Lantronix (www.lantronix.com). “At the same time, it complements the strength we are seeing in our drone and aerospace and defence business by expanding into another high-value growth vertical: critical infrastructure monitoring. Nero brings a proven SaaS application layer, established North American customers and approximately 125,000 asset tags under management, while Lantronix brings the edge hardware, secure connectivity and firmware expertise.”

Nero Global Tracking provides GPS-based vehicle and asset tracking for fleet operators, municipalities, restoration contractors and industrial customers throughout North America. Pairing Nero Global Tracking with Lantronix’s gateways, edge compute and connectivity products advances the company’s hardware-plus-recurring-revenue model.

Nero Global Tracking customers and channel partners can expect continuity in service, support, and product roadmap. The approximately 30-person IoT team will join Lantronix, adding domain expertise in SaaS-based asset tracking, customer support and application-layer software development. Over time, Nero customers and partners will gain access to Lantronix’s broader IoT portfolio, including opportunities to integrate Nero Global Tracking with Lantronix hardware, connectivity and edge compute products.

“Lantronix is the right home for this business,” said Sumit Kumar, CEO of Vecima Networks (vecima.com). “This transaction gives our IIoT team, customers and channel partners access to a larger global platform with a more comprehensive, end-to-end solution. It brings together industry-leading hardware, connectivity and application software under one roof. With additional resources to support innovation and growth, we’re confident our customers will benefit from an even stronger value proposition, while also allowing Vecima to sharpen its focus on its core broadband and video markets.”

The transaction is expected to close in the near term, subject to customary closing conditions.