PowerFleet Inc has announced a merger with South African fleet manager MiX Telematics to form what they said will be one of the largest mobile asset Internet of Things (IoT) Software-as-a-Service (SaaS) providers worldwide.
In a statement, the companies said the combination “will form a scaled, global entity of choice focused on helping customers save lives, time, and money by solving mission-critical business challenges including safety and risk management, compliance, sustainability, and operational efficiency.”
PowerFleet’s shares were up 28% at $2.52 shortly before midday in New York. MiX Telematics NYSE-listed American Depository Shares (ADSs) gained 16% to $6.51.
Under the terms of the transaction, MiX shareholders will exchange all their ordinary shares, including those represented by ADSs for Powerfleet shares and will own roughly 65% of the combined entity, with Powerfleet shareholders holding the remaining approximately 35%.
The combined business would have posted total revenue of $279 million, including $210 million in recurring high-margin SaaS revenue, and $39 million of underlying earnings (EBITDA) for the trailing 12-month period to June 30, 2023, the companies said.
"By leveraging our proven SaaS strategy across the combined business, spearheaded by our Unity platform and data highway, we firmly believe we will be extremely well positioned to drive incremental market consolidation,” commented Powerfleet CEO Steve Towe, who will continue as CEO of the merged business.
“Realizing transformative scale, this transaction with MiX will provide the go-forward company with 1.7 million subscribers, and the ability to sell additive and accelerated AI and data-powered software solutions to a truly global set of customers.”
MiX CEO Stefan Joselowitz plans to retire once the transaction is completed but will remain a shareholder of the new combined entity.
"I am delighted to have finally found an ideal partner that shares our values and strategic goals to take the company to the next level,” Joselowitz said.
“We strongly believe that Powerfleet's Unity strategy and our combined scale perfectly positions us to revolutionize the mobile asset IoT SaaS industry and drive transformative growth.”
The transaction is expected to close in the first quarter of 2024 and the combined business will be branded as Powerfleet with its primary listing on Nasdaq.
Contact the author at stephen.gunnion@proactiveinvestors.com