Expected to Create Industry Powerhouse with
Total Revenue Anticipated to Exceed $400
Million Including $300+ Million of Recurring High Margin
SaaS Revenue
Highly Accretive with $200 Million Transaction Value Representing 8x
Pre-Synergy and 5x Post-Synergy Adjusted EBITDA
Acquisition Strengthens Powerfleet's North
American Presence, Fuels Top-Line Growth in Europe and Australia, and Extends Go-to-Market Reach
through Scaled Indirect Channel
Transaction Accelerates Powerfleet's Momentum
towards Achieving Long-Term 20%+ Organic Revenue Growth and Rule of
40 Performance
Creates Highly Effective Combined Global
Entity with over 2.6 Million Combined Subscribers and 2,500
Employees with Dedicated Teams to Support Customers across 6
Continents
Transaction Expected to Close on October 1, 2024
Leadership Teams to Host Joint Q&A
Call with Analysts and Investors Today, September 18, 2024 at 10:30 am ET
WOODCLIFF LAKE, N.J., Sept. 18,
2024 /PRNewswire/ -- Powerfleet, Inc. (Nasdaq:
AIOT), a leading provider of AIoT SaaS solutions for the mobile
asset industry, today announced it has entered into a definitive
agreement providing for the strategic acquisition of Fleet
Complete, a prominent player in connected vehicle technology and
fleet management. With 2.6 million total combined subscribers and
forecasted combined revenue of over $400
million, the acquisition is expected to solidify
Powerfleet's position as a true global leader in the rapidly
expanding AIoT market, driving toward "Rule of 40" SaaS financial
performance in the medium term.
Fleet Complete is a leading provider of essential fleet, asset,
and mobile workforce management solutions across North America, Australia, and Europe. More than half of Fleet Complete's
revenue is generated through strong distribution partnerships with
major international telecommunications providers and market-leading
OEMs.
STRATEGIC RATIONALE
Compelling benefits expected from the transaction:
- Market Leadership: The addition of Fleet Complete
strengthens Powerfleet's strategic position as a leader in the AIoT
SaaS market, with a combined subscriber base of 2.6 million. The
increased scale solidifies Powerfleet's enhanced competitive
position relative to the other largest players in the industry as
the only market leader offering a full suite of seamless
over-the-road and in-warehouse solutions.
- Geographic Expansion and GTM Diversification: The
acquisition strengthens Powerfleet's North American presence and
fuels top-line growth in key international markets, including
Europe and Australia. The integration of Fleet Complete's
high-velocity mid-market business with Powerfleet's enterprise
operations creates a balanced and resilient business model across
regions, reducing risk and enhancing growth potential.
- Unity and AI Innovation: The acquisition significantly
enhances the scale of Unity's data ingestion, integration
capabilities, and cross-sell/upsell potential with the addition of
600,000 new subscribers. Fleet Complete's AI-powered video
solution, FC Vision, also expands Unity's AI-driven offerings,
particularly in the camera space, further advancing Powerfleet's
leadership in AI innovation and accelerating time-to-market for new
solutions.
- Robust Indirect Channel: The acquisition opens
significant cross-selling opportunities through Fleet Complete's
well-established indirect channel relationships, especially with
major US and Canadian telecommunication carriers, offering
considerable growth potential.
- Enhanced Shareholder Value: Highly accretive
transaction, valued at 8 times pre-synergy and 5 times post-synergy
adjusted EBITDA, with improved geographical revenue mix and
multiple avenues for accelerated topline growth driving toward
"Rule of 40" SaaS financial performance in the medium term.
MANAGEMENT COMMENTARY
"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,"
said Steve Towe, CEO of Powerfleet.
"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," said
Tony Lourakis, Fleet Complete's
Chief Executive Officer. "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
- Adds significant scale and market reach in the strategically
important North American, European and Australian markets
- 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 October 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.
ANALYST AND INVESTOR Q&A CALL TO BE HELD SEPTEMBER 18, 2024 AT 10:30amET
Powerfleet and Fleet Complete management will host a joint
conference call with analysts and investors to discuss the
transaction today at 10:30 a.m. Eastern
Time (7:30 a.m. Pacific time).
Management will make brief prepared remarks followed by a
question-and-answer session.
Date: Wednesday, September 18,
2024
Time: 10:30 a.m. Eastern time
(7:30 a.m. Pacific time)
Toll Free: 888-506-0062
International: 973-528-0011
Participant Access Code: 665475
The conference call will be broadcast simultaneously and available
for replay here and via the investor section of the company's
website at ir.powerfleet.com.
Powerfleet plans to hold a fireside chat on or about
October 2, 2024 to more fully discuss
the transaction and its rationale and expected benefits upon its
close. Details for this call will be communicated in advance of the
call.
Additionally, Powerfleet and Fleet Complete plan to hold a joint
Investor Day on Thursday, November 21,
2024 on location in New York
City as well as virtually. Details will be communicated
shortly.
TRANSACTION ADVISORS
William Blair & Company
L.L.C. is acting as lead financial advisor to Powerfleet on the
acquisition. Rand Merchant Bank is
acting as South African advisor to Powerfleet. William Blair & Company L.L.C. and Craig
Hallum Capital Group L.L.C. are acting as co-lead placement agents
on the PIPE offering. Roth Capital Partners, L.L.C.
Barrington Research Associates Inc. and FirstRand Bank Limited are
serving as co-placement agents on the PIPE offering. Olshan Frome
Wolosky LLP and Aird & Berlis LLP are acting as legal advisors
to Powerfleet.
Centerview Partners LLC and Barclays are serving as financial
advisors to Fleet Complete. Torys LLP is acting as legal advisor to
the co-controlling shareholders of Fleet Complete.
NON-GAAP FINANCIAL MEASURES
This press release contains certain non-GAAP measures of
financial performance. These non-GAAP measures include EBITDA and
adjusted EBITDA. Reference to these non-GAAP measures are not a
substitute for, or superior to, GAAP results. These non-GAAP
measures are provided to enhance investors' overall understanding
of Powerfleet's expected financial performance. These non-GAAP
measures are not measures of financial performance or liquidity
under GAAP and, accordingly, should not be considered as an
alternative to their corresponding GAAP measures as an indicator of
operating performance or liquidity. Because Powerfleet's method for
calculating the non-GAAP measures may differ from other companies'
methods, the non-GAAP measures may not be comparable to similarly
titled measures reported by other companies. Powerfleet is not
providing a reconciliation for non-GAAP adjusted EBITDA and EBITDA
to net income (loss) for the forecasted numbers presented herein
because it cannot, without unreasonable effort, predict the special
items that could arise, and Powerfleet is unable to address the
probable significance of the unavailable information.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking statements within
the meaning of federal securities laws. Powerfleet's actual results
may differ from its expectations, estimates and projections and
consequently, you should not rely on these forward-looking
statements as predictions of future events. Forward-looking
statements may be identified by words such as "expect," "estimate,"
"project," "budget," "forecast," "anticipate," "intend," "plan,"
"may," "will," "could," "should," "believes," "predicts,"
"potential," "continue," and similar expressions.
These forward-looking statements include, without limitation,
Powerfleet's expectations with respect to its beliefs, plans,
goals, objectives, expectations, anticipations, assumptions,
estimates, intentions and future performance, as well as
anticipated financial impacts of the acquisition of Fleet Complete,
the satisfaction of the closing conditions to the acquisition of
Fleet Complete and the timing of the completion of such
acquisition. Forward-looking statements involve significant known
and unknown risks, uncertainties and other factors, which may cause
their actual results, performance or achievements to be materially
different from the future results, performance or achievements
expressed or implied by such forward-looking statements. All
statements other than statements of historical fact are statements
that could be forward-looking statements. Most of these factors are
outside Powerfleet's control and are difficult to predict. The
risks and uncertainties referred to above include, but are not
limited to, risks related to: (i) the completion of the acquisition
of Fleet Complete in the anticipated timeframe or at all; (ii) the
satisfaction of the closing conditions to the acquisition of Fleet
Complete; (iii) the ability to realize the anticipated benefits of
the acquisition of Fleet Complete; (iv) the ability to successfully
integrate the businesses; (v) disruption from the acquisition of
Fleet Complete making it more difficult to maintain business and
operational relationships; (vi) the negative effects of the
announcement of the acquisition of Fleet Complete or the
consummation of the acquisition of Fleet Complete on the market
price of Powerfleet's securities; (vii) significant transaction
costs and unknown liabilities; (viii) litigation or regulatory
actions related to the acquisition of Fleet Complete; and (ix) such
other factors as are set forth in the periodic reports filed by
Powerfleet with the Securities and Exchange Commission ("SEC"),
including but not limited to those described under the heading
"Risk Factors" in its annual reports on Form 10-K, quarterly
reports on Form 10-Q and any other filings made with the SEC from
time to time, which are available via the SEC's website
at http://www.sec.gov. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
to be incorrect, actual results may vary materially from those
indicated or anticipated by these forward-looking statements.
Therefore, you should not rely on any of these forward-looking
statements.
The forward-looking statements included in this press release
are made only as of the date of this press release, and except as
otherwise required by applicable securities law, Powerfleet assumes
no obligation, nor does Powerfleet intend to publicly update or
revise any forward-looking statements to reflect subsequent events
or circumstances.
Powerfleet Investor Contacts
Jody Burfening and Carolyn Capaccio
LHA Investor Relations
AIOTIRTeam@lhai.com
Powerfleet Media Contact
Jonathan Bates
jonathan.bates@powerfleet.com
+44 7921 242 892
View original content to download
multimedia:https://www.prnewswire.com/news-releases/powerfleet-announces-strategic-acquisition-of-fleet-complete-302251726.html
SOURCE Powerfleet