In effect from Dec. 1, following NZ Commerce commission clearance, the deal expands EROAD’s connected unit base to 199,1561 units globally
PORTLAND, OR and AUCKLAND, NZ — Dec. 1, 2021 — EROAD (NZX/ASX: ERD) today announced that it has closed the deal to acquire 100% of Coretex Limited (“Coretex”) following New Zealand Commerce Commission’s decision to grant clearance for the acquisition on November 17th, with the combined entity poised to increase its share in North America, which is leading growth in the global telematics market that is expected to register a CAGR of 15-20% between 2021 and 20262.
Under the terms of the acquisition, a payment of NZ$157.7 million (US$ 107.2m3) in upfront consideration has now been finalized, with a remaining NZ$30.6 million (US$20.8m2) in contingent consideration (payable in FY23 subject to Coretex achieving certain performance milestones).
Acquiring Coretex, a provider of vertically specialized enterprise-grade telematics solutions in North America, Australia and New Zealand, will advance EROAD’s position as a global vehicle telematics leader onto a faster trajectory to reach its goal of 250,000 global units, and specifically enable accelerated growth in North America.
“We have consistently stated that acquisitions would be part of our global growth strategy. To accelerate growth, any acquisition target needed to deliver increased capability, improved customer experiences and access to additional market verticals,” said Steven Newman, CEO of EROAD. “In Coretex, we have found a highly complementary partner which allows us to satisfy these criteria, with the combined organization bringing the expertise and scale to deliver against market demand, faster.”
Specifically, in the North American market EROAD has strengthened its position as a significant supplier of in-vehicle management solutions and trailer telematics, and Coretex’s portfolio of products, solutions and services open new avenues for growth in vertical markets including construction, mixed fleets, as well as waste and recycling.
“Coretex excels in thinking through the needs of the customer within the frame of the supply chain by taking an end-to-end vertical industry approach,” said Casey Ellis, President of EROAD North America. “Balance this against integration of their next generation hardware into EROAD’s broad regulatory product suite and it creates an advanced market fit. We’re also identifying a new set of short- and long-term strategic goals with an immediate upside for faster growth, particularly in the North American market.”
The combined entity is undertaking strategic planning to build on the rationale identified in the business case for the acquisition, with an aim to complete the integration within the next 12-18 months.
And as of Dec. 1, Coretex CEO Selwyn Pellett joins4 as a member of the EROAD Board as an Executive Director and as an advisor to Steven Newman, EROAD’s CEO, in continued support of the successful integration of the two businesses.
EROAD believes every community deserves safer roads that can be sustainably funded. We develop technology solutions that help commercial fleets stay in compliance, improve safety and reduce the risk and operational costs of driving. We create applications that improve visibility into operations, reduce paperwork and help businesses operate efficiently and profitably. And we provide aggregated and anonymized data and analytics to government agencies, universities and others who fund, maintain and develop our road infrastructure. EROAD (ERD) is dual-listed on the ASX and NZX, and employs almost 300 staff located across New Zealand, Australia and North America. To learn more about EROAD, visit www.eroad.com.
Coretex delivers compliance and fleet management solutions to more than 60,000 connected vehicles in the construction, mixed fleet and waste and recycling industries. Coretex’s cloud-based visualization software helps customers worldwide turn rich data into automated business intelligence to enhance safety, reduce waste and improve productivity. Coretex has customers all over the globe. Our business is run from offices in North America, Australia and New Zealand. Our cloud-based software platform and in-vehicle sensor technology has been proven over 16 yars in the most demanding sectors possible: construction, refrigerated transport and waste.
1 As at 30 September 2021
2 According to report published on Global Fleet as of 30 July 2021
3 on NZD/USD exchange rate of 0.68 as at 29 November 2021
4 As at December 1, 2021