Xigem Technologies Corporation announced that it has entered into a letter of intent to acquire up to 22% of the common shares of iDealer, Inc in an all-cash transaction valued at up to $874,896.
iDealer is a software as a service (SaaS) based transportation, dispatch and routing management system which is built on a proprietary artificial intelligence technology. It automates dispatching, delivers optimal routing and manages changes in real-time for automotive dealers and their on-duty drivers when shuttling customers and parts, a mission-critical “last mile” operation.
“iDealer extends and complements Xigem's growing portfolio of SaaS platforms for the remote economy with an entrée into the trillion-dollar automotive dealer market, and enhances Xigem’s ability to enter other verticals where the real-time monitoring of and communication with fleets is fundamental to their success,” chief technology officer Anton Tikhomirov said.
“This investment is a strong fit with our strategy of aggregating a portfolio of technologies that are capable of disrupting traditional business models.”
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Xigem said the iDealer SaaS platform has gained rapid traction among automotive dealers in North America and Australia, having been implemented at dealerships representing every major automobile brand.
Data collected by iDealer shows that those dealerships have generated on average, 9-times return on investment in the iDealer solution. The company also has an exclusive integration partnership with Uber for Business to facilitate high-demand situations, extend service areas for iDealer users, reduce average ride costs and enable operators to optimize their in-house fleet size.
Xigem noted that the automotive dealer market is expected to reach approximately US$1 trillion in 2021. According to McKinsey & Company, parts-and-service departments are contributing a growing share of dealership profits.
Payments for the iDealer stake will be made in three tranches over fifteen months beginning on the date the transaction closes, it said. The third tranche is subject to the performance of iDealer.
It will also appoint a representative to the iDealer board of directors. On a continuing basis, the investment will allow Xigem to recognize its share of profit or loss, after the effective date of acquisition, from the results of iDealer.
“We are pleased to add Xigem as a strategic investor and look forward to a successful collaboration,” iDealer CEO Sergey Nekipelov said.
“We will invest this capital into the further development and commercialization of our technology to deliver new solutions and additional value to our customers in the automotive industry and beyond.”
The transaction is expected to close by December 31, 2021, subject to the completion of due diligence, the execution of definitive agreements and the receipt of any regulatory approvals.
Toronto-based Xigem is a technology provider for the emerging near trillion-dollar remote economy, with software capable of improving the capacity, productivity, and overall remote operations for businesses, consumers and other organizations.
Contact the author at stephen.gunnion@proactiveinvestors.com