WOODCLIFF LAKE, N.J. - Powerfleet, Inc. (NASDAQ:AIOT), an AIoT SaaS solutions provider for mobile asset management, has announced a definitive agreement to acquire Fleet Complete, a connected vehicle technology and fleet management company. The transaction, valued at $200 million, is anticipated to close on October 1, 2024, and is expected to create a global entity with over 2.6 million subscribers and 2,500 employees.
The acquisition aims to strengthen Powerfleet's North American market presence and drive growth in Europe and Australia, while also enhancing its indirect channel sales through partnerships with major telecommunications providers. The combined revenue of the entities is projected to surpass $400 million, with more than $300 million coming from high-margin recurring SaaS revenue.
Powerfleet's CEO, Steve Towe, emphasized the strategic benefits of the acquisition, stating it would improve revenue quality and EBITDA by increasing scale and operating presence. The integration of Fleet Complete's mid-market business with Powerfleet's enterprise operations is expected to create cross-selling opportunities and a compelling value proposition for new and existing customers.
The transaction is structured to be financed through $125 million from a senior secured term loan, $70 million from a private placement of common stock, and $15 million of common stock issued to an affiliate of Ontario Teachers' Pension Plan Board, an existing shareholder of Fleet Complete.
The acquisition is subject to customary closing conditions. A joint conference call with analysts and investors was held today to discuss the transaction details. Furthermore, a fireside chat is planned for around October 2, 2024, to discuss the transaction upon its close, with a joint Investor Day scheduled for November 21, 2024.
This article is based on a press release statement from Powerfleet. The financial figures mentioned, such as EBITDA and revenue projections, are not GAAP measures, and the company has not provided a reconciliation for these non-GAAP measures due to the unpredictability of special items that could arise.
In other recent news, PowerFleet (NASDAQ:AIOT), Inc. has reported significant developments. The company experienced a 6% increase in total revenue and gross profit, with adjusted EBITDA rising by an impressive 141%. Fourth-quarter revenue reached $34.5 million, largely driven by strong performance in its software-as-a-service (SaaS) sector. PowerFleet's merger with MiX Telematics (NYSE:MIXT) has been a highlight, with both Raymond James and Craig-Hallum initiating coverage with an Outperform and Buy rating respectively.
The company has also appointed Deloitte & Touche as its new independent registered public accounting firm, replacing Ernst & Young. This change, approved by PowerFleet's Audit Committee, was not due to any disagreements on accounting principles or practices. The company has set September 17, 2024, as the date for its upcoming annual meeting of stockholders.
PowerFleet's inclusion in the Russell 2000® Index and a change of its ticker symbol to AIOT are also among the recent developments. In line with its growth strategy, PowerFleet has welcomed Andrew Martin, a partner at Private Capital Management, to its board of directors. These developments highlight PowerFleet's ongoing efforts to unify business operations and provide actionable insights to improve safety, efficiency, and cost savings.
InvestingPro Insights
As Powerfleet, Inc. (NASDAQ:AIOT) prepares to expand its global footprint with the acquisition of Fleet Complete, the company's financial health and market performance are of particular interest to investors. According to InvestingPro data, Powerfleet's market capitalization stands at $501.06 million, reflecting the company's current valuation in the market. Despite not being profitable over the last twelve months, with a negative P/E ratio of -2.62, analysts are optimistic about the company's future. They predict Powerfleet will turn profitable this year, which aligns with the company's strategic growth plans through the Fleet Complete acquisition.
InvestingPro Tips reveal that analysts expect sales growth in the current year, which may be further bolstered by the acquisition. Additionally, the company's stock price movements have been quite volatile, but it has achieved a high return over the last year, with a 117.76% price total return, signaling strong investor confidence. It's also worth noting that two analysts have revised their earnings estimates upwards for the upcoming period, suggesting positive sentiment regarding Powerfleet's financial prospects.
While the company does not pay a dividend, which might be a consideration for income-focused investors, the potential for capital appreciation could appeal to growth-oriented shareholders. For those interested in more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/AIOT, which could provide further guidance on Powerfleet's potential in light of this significant acquisition.
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