Digital Dispatch Buys StrataGen for $6 Million (10/2)
Tuesday, October 02, 2007 | Comments

Digital Dispatch Systems announced plans to acquire all of the shares of StrataGen Systems for $6 million in cash. The acquisition is the second buy for Digital Dispatch this year following its acquisition in August of Finnish company Mobisoft for $7.7 million.

About $4.5 million is payable upon closing, and $1.5 million is payable in 15 monthly installments of $100,000 commencing 90 days after the acquisition date. In addition, after the acquisition, StrataGen will pay certain departing shareholders up to a maximum $2.3 million in bonuses, commissions, and consulting fees.

William Ho, chief technology officer (CTO) and chief architect of StrataGen, is expected to continue with StrataGen after the acquisition in his current role and will transfer patents developed by him to StrataGen. Dr. Allen Ho, chief executive officer (CEO) of StrataGen, will be available as a consultant on an as-needed basis.

Founded in 1998, StrataGen designs and provides advanced scheduling, dispatching, and client management software for the public transit domain for paratransit services. Paratransit services were mandated by the 1990 Americans with Disabilities Act, which requires any community providing fixed-route services to also provide door-to-door van service for people with disabilities and elderly people.

"The acquisition of StrataGen is a cornerstone of our diversification strategy," said Vari Ghai, CEO of Digital Dispatch. "By combining the transit businesses of Digital Dispatch and the recently acquired MobiSoft with StrataGen, we achieve instant critical mass in the transit industry and become a vertically integrated turnkey solutions company. The combined customer base includes four of the top five and 10 of the top 20 transit authorities in North America."

Executives said the diversification strategy includes segregating the company into five business units in the following areas: taxi market; transit market; trucking, towing, and limo markets; mobile data computers and related infrastructure; and advertising and e-commerce in vehicles.

Separately, Digital Dispatch Systems said the acquisition of Mobisoft would close Oct. 5.

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