AUCKLAND, NEW ZEALAND: EROAD Limited has entered into a conditional agreement to acquire 100% of Coretex Limited in a NZ$188.3 million deal, a news release said.
Under the agreement, EROAD pays NZ$157.7m in upfront consideration and NZ$30.6m consideration contingent on certain performance milestones.
The acquisition will be partly funded by a NZ$64.4m fully underwritten conditional placement and a NZ$16.1m share purchase plan.
The acquisition is expected to complete in early H2 FY22 and is subject to conditions, including Commerce Commission clearance in relation to Coretex’s New Zealand business, Overseas Investment Office approval and EROAD shareholder approval.
Steven Newman, Chief Executive Officer comments: “The acquisition of Coretex is truly transformational for EROAD. Accelerating our key growth metrics by two years in North America and Australia and positioning us to become a bigger player in the global telematics market.”
“EROAD and Coretex both aspire to create a safer, more sustainable and more productive society. Combining EROAD’s expertise in broadly adopted regulatory telematics solutions with Coretex’s extensive vertical telematics expertise and products creates an advanced market fit”
“We have always stated that an acquisition would be part of our growth strategy to reach our medium and long-term goals. We have been clear we would seek complementary and proven technology to augment our product range. To accelerate growth, any acquisition needed to deliver increased capability, improved customer experiences and access to additional market verticals. In Coretex we have found a highly complementary partner which allows us to satisfy these criteria.”
Coretex is a telematics vertical specialist provider delivering enterprise grade solutions with connected units in North America, Australia and New Zealand. Coretex is focused on growth verticals of less than a truck load (LTL), refrigerated transport, construction, and waste & recycling. Coretex has a well advanced pipeline of North American Enterprise customers.
In FY22 Coretex is forecast to deliver AMRR of between $50-$53m and EBITDA of $7-9m. Both EROAD and Coretex aspire to create a safer, more sustainable and more productive society. EROAD’s customer solutions not only help to reduce speed, ensure vehicles are safe and improve driver behaviour, but they also help our customers achieve greater fuel efficiency, reduce compliance costs and improve fleet productivity.
Coretex’s specialist products complement EROAD’s solutions. For example, Coretex’s refrigerated transport solutions optimise compliance, safety and fuel consumption to help reduce wastage and emissions. Furthermore, their construction solutions help reduce construction and industrial wastage and their waste & recycling solutions help reduce contamination.
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