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ID Systems to acquire Pointer Telocation
Posted on Thursday, 14 March 2019 14:42
ID Systems has reached an agreement to purchase all outstanding shares in Israeli telematics and mobile Internet-of-Things (IoT) provider Pointer Telocation for USD 140.00 million in cash and stock.
Under the terms of the transaction, USD 72.00 million will be paid in cash and around 11.00 million scrips will be issued in PowerFleet, a newly-created company that will hold both firms.
Following closing, expected in summer 2019 and subject to shareholder and regulatory approval, the combined business will be listed on Nasdaq and the Tel Aviv Stock Exchange under the rebranded name.
Together, ID Systems and Pointer generated USD 131.00 million in revenue and USD 14.00 million in adjusted earnings before interest, taxes, depreciation and amortisation for fiscal 2018.
Shareholders in the target will receive USD 8.70 in cash and 1.27 items of stock in PowerFleet for every scrip held.
The total offer price of USD 16.44 apiece represents a premium of 13.3 per cent to Pointer’s close of USD 14.50 prior to the announcement on 12th March.
Shares in the company rose 7.7 per cent to USD 15.61 today, giving the group a market capitalisation of USD 126.94 million.
ID Systems believes the addition of Pointer will allow the new business to achieve total revenue of USD 150.00 million in the first full-year following closing, with organic annual revenue growth of around 15.0 per cent thereafter.
In addition to the acquisition, Abry Partners has agreed to buy USD 50.00 million-worth of convertible preferred stock in PowerFleet.
Pointer claims to be a leading provider in the area of mobile IoT to the automotive, insurance and logistics sector.
The group’s cloud-based services platform has more than 275,000 monthly subscribers and extracts and captures data from organisations’ mission critical mobility points, including drivers, routes, vehicles and containers.
ID Systems believes that following completion, the group will have over USD 20.00 million in cash on hand and credit facilities, which has been helped along by Bank Hapoalim offering a USD 30.00 million term loan and a USD 10.00 million revolving credit facility in the new business.
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