Powerfleet, a provider of AIoT SaaS solutions for the mobile asset industry, entered into a definitive agreement providing for the strategic acquisition of Fleet Complete, a player in connected vehicle technology and fleet management.
“The agreement to acquire Fleet Complete is a transformative milestone for Powerfleet and is expected to significantly enhance our revenue quality and bolster our EBITDA by increasing our scale and operating presence across North America and Europe. It will also extend significantly our go-to-market reach through established channel partnerships with some of the world’s largest telecommunications providers,” Steve Towe, CEO of Powerfleet, said. “Additionally, it will support the strength of our revenue streams by integrating Fleet Complete’s high-velocity mid-market business with our enterprise base; and expand the reach of our unique Unity data highway and innovative in-warehouse solutions across the Fleet Complete established subscriber base, creating powerful cross- and up-sell opportunities with existing customers and a compelling value proposition for new customers.”
“The disruptive and differentiated intent of Powerfleet’s unity strategy was a key factor in our decision to join forces,” Tony Lourakis, CEO of Fleet Complete, said. “Unity’s device-agnostic capabilities, expanding suite of prepackaged third-party system integrations and advanced AI align seamlessly with the long-term vision for our state-of-the-art FC Hub platform. The business combination will allow us to deliver deeper insights and enhanced solutions to customers. By leveraging Unity’s powerful technology and Powerfleet’s full technology portfolio, we can accelerate innovation across our offerings and provide even greater value to our combined customer base.”
Acquisition Summary and Timing
- Total transaction value of $200 million
- Incorporating Fleet Complete’s annual recurring revenue and EBITDA Guidance of $105 million and $25 million, respectively, combined business is projected to generate revenue of $405 million, including $300+ million in high-margin recurring SaaS revenue and $85 million in adjusted EBITDA for the fiscal year ending March 31, 2025 (pro forma for an April 1, 2024, transaction date)
- The company expects to secure an additional $15 million in EBITDA from revenue and cost synergies within two years of close
- Transaction is subject to customary closing conditions and is expected to close on Oct. 1, 2024
Transaction Terms and Financing
The company will finance the consideration paid to Fleet Complete shareholders through:
- $125 million from a senior secured term loan facility provided by the company’s existing lender, Rand Merchant Bank (a division of FirstRand Bank Limited)
- $70 million raised through a private placement of the company’s common stock to a combination of existing and new shareholders
- $15 million of the company’s common stock to be issued to an affiliate of Ontario Teachers’ Pension Plan Board, an existing shareholder of Fleet Complete, on the same terms provided to the investors in the private placement
- The closing of the debt and equity financings is subject to customary closing conditions and is expected to occur concurrently with the closing of the acquisition.
