The purchase agreement also provides for contingent earn-out cash consideration for up to an additional $15 million based on the achievement of certain revenue targets for the acquired business following the closing of the acquisition during the 2018, 2019 and 2020 fiscal years.
Headquartered in Charleston, South Carolina, Elauwit provides high-speed Wi-Fi to 220 student housing and multifamily properties across the United States. Elauwit’s expertise in installing and operating Wi-Fi networks and services is highly complementary to Boingo’s military broadband product, both in terms of technology, infrastructure and the demographic served.
Boingo expects the transaction to expand its addressable market for venues by an additional 16 million multi-dwelling units across the United States. This represents a significant opportunity as the MDU market has been rapidly growing at a rate of approximately 20 percent year-over-year with MDU annual housing starts approaching an estimated 400,000 in 2018.
“We are thrilled to welcome the Elauwit team to the Boingo family and to jumpstart our entry into the rapidly growing multifamily space,” commented David Hagan, Chief Executive Officer of Boingo Wireless. “The acquisition aligns well with our strategy of securing long-term wireless rights at venues, building state of the art networks at these venues and monetizing those networks through our unique suite of products and services.”
Hagan continued, “With a 10-year track record and excellent reputation, Elauwit has done an incredible job over the past decade organically growing their business in the MDU space. We believe there is an opportunity to fuel growth in the MDU space by putting our capital to work on a selective basis. We also believe there is an opportunity to overlay additional products, such as small cell solutions, for accretive monetization and greater densification of coverage.”
“We’ve been fanatical about creating the best connectivity experiences in the multifamily market,” said Dan McDonough, chairman and founder of Elauwit. “We look forward to bringing Boingo’s resources as a larger, better capitalized company and their innovations as a technology pioneer to our customers. Our employees and our customers have always been at the heart of Elauwit’s success. I’m excited that both will have a bright future as part of the Boingo family.”