With its proposed $253 million purchase of Telular Corp. (NASDAQ:WRLS), Avista Capital Partners is pursuing the market for machine-to-machine wireless communications.

The sale comes as CEO Joe Beatty is set to leave the company on May 2, when Telular releases its second-quarter results.

Telular develops home security systems, monitoring devices for tracking tractor trailers and rail cars and remote machinery that measures the levels within tanks that store petroleum and bulk chemicals. Its biggest customer, ADT Corp., accounted for more than a quarter of its top line in 2012.

Avista said it will pay $12.61 per share in cash through a tender offer and assume $18.5 million in net debt. Telular has until May 29 to solicit higher bids.

Shares of the company gained $3, or more than 31%, to $12.63 on Monday.

Telular was founded two decades ago and is based in Chicago. Avista partner Brendan Scollans said the company would use acquisitions, as well as internal growth, to continue its expansion.

The company's Telguard home security unit provides more than half of its revenue, which totalled nearly $80 million in 2012.

Its main competitors in the home security market include Honeywell International Inc.; Alarm.com, which is backed by ABS Capital Partners and Egis Capital Partners; Tyco International Ltd.'s DSC and Numerex Corp.

Telular says that it was the first security provider to upgrade its alarms for 3G and 4G networks in the fall of 2012.

Machine-to-machine, or M2M, communications have been an attractive market for telecoms, as mobile phones reach high levels of penetration and have less potential for growth.

AT&T Inc. announced in April that it will provide security and a range of home automation services that it has branded as Digital Life.

Telular has ties to the Dallas-based telecom giant. AT&T provides wireless networking for Telular's home security and tank monitoring services. Telular chairwoman Betsy Bernard is a former AT&T executive.

Other carriers have turned to the market segment. Verizon Communications Inc. gained M2M capabilities when it purchased Apollo Global Management LLC-backed Hughes Telematics Inc. for $612 million in 2012. Hughes is active in markets such as wireless automotive fleet management.

After home security, Telular's second-biggest unit is the truck and rail-tracking business. Telular got into the business through the $42 million acquisition of SkyBitz Inc. in 2012.

The company uses satellite services from Globalstar Inc., Iridium Communications Inc. and Harbinger Capital Partners-backed LightSquared Inc. to follow tractor trailers, rail cars and other vehicles.

It competes against I.D. Systems Inc., Qualcomm Inc. and Spireon Inc.'s FleetLocate in vehicle tracking. In tank monitoring, Robertshaw Industrial Products' Centeron is Telular's largest rival.

Avista's purchase requires that existing investors tender at least two-thirds of the outstanding shares.

The Department of Justice and the Federal Communications Commission must also approve the transaction.

Avista and Telular hope to close the deal within 50 to 75 days.

Oppenheimer & Co. is financial adviser to Tetular, and Kelley Drye & Warren LLP and Covington & Burling LLP are its legal advisers. SunTrust Robinson Humphrey Inc. and Kirkland & Ellis LLP are advising Avista.