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WiLAN Inc. is expanding beyond its core business—licensing wireless technology patents—to acquire companies in the connected-machines market.
The company has approved a plan to buy businesses developing products in the “internet of things” market to build recurring revenue streams. The new businesses will operate alongside WiLAN’s intellectual property licensing business, the company said in a statement April 17. WiLAN will also change its name to Quarterhill Inc. on or about June 1, it said.
“This strategy provides an ideal opportunity for us to diversify and inject new growth into the business, while addressing the ‘lumpy’ financial performance that has come to be associated with stand-alone patent licensing businesses,” CEO James Skippen said in the statement. “Because the environment for patent licensing companies has changed so much over the past decade, we have concluded that patent licensing as a stand-alone business will not meet our long-term objectives as a public company.”
In recent years, case law and new regulation have made it more challenging for companies that don’t make products or provide services to earn a predictable revenue stream from licensing or enforcing their patents.
Ottawa, Canada-based WiLAN, in its first internet of things purchase, has agreed to buy traffic management company International Road Dynamics for an equity value of C$63.5 million ($47.4 million) with cash on its balance sheet, which was C$143.1 million ($107.7 million) on December 31, WiLAN said in its statement. The deal is expected to close in the second quarter of this year. International Road’s services include traffic data collection, fleet management and bridge monitoring.
International Road Dynamics has a portfolio of more than 80 patents and pending applications, according to the statement.
The acquired businesses will operate as independent subsidiaries of Quarterhill, with patent licensing continuing as a separate unit, the company said.
Skippen will step into the executive chairman role, and Chief Financial Officer Shaun McEwan will serve as interim CEO, the company said. Its board has begun looking for a full-time chief executive, it said.
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