Global fleet and asset management firm Mix Telematics. File: ANA
Nasdaq-listed internet-of-things (IoT) services company Powerfleet Inc aims to attain a secondary listing on the JSE in terms of a proposed share-swop merger scheme with JSE-listed MiX Telematics.
MiX Telematics’ share price shot up 15.59% to R5.19 on the JSE late yesterday afternoon. On the Nasdaq, at the same time, Powerfleet’s share price was 25.73% higher at $2.73 (R52.29).
The companies said in a joint statement yesterday that Powerfleet intended to acquire all of MiX’s shares by way of a scheme of arrangement, and the scheme would result in the termination of MiX’s JSE and American Depositary Receipts Program listings.
After the proposed deal was done, erstwhile MiX shareholders would hold 65.5% of the enlarged share capital of PowerFleet.
In terms of the plan between the two companies, PowerFleet would acquire all of MiX’s shares owned by MiX shareholders, excluding treasury shares, in exchange for 0.12762 newly issued shares of PowerFleet common stock per share.
MiX is a global provider of connected fleet and mobile asset solutions delivered as Software-as-a-Service (Saas) to more than 1 042 000 subscribers in more than 120 countries.
PowerFleet, listed on the Nasdaq since 1999, markets and sells connected IoT data solutions to a wide range of customers in the commercial and government sectors.
Describing the reasons for the deal, MiX and PowerFleet said they were listed on public exchanges with the primary aim of securing efficient access to capital markets to facilitate expansionary initiatives and accelerate growth, obtain scale and create value for shareholders.
However, both companies had remained sub-scale and neither had been able to consistently access reasonably priced equity capital to pursue expansionary strategic objectives.
The proposed transaction would combine a strong pipeline of new business opportunities and technology with an improved capital structure and increased scale.
The companies would benefit from one another’s complementary business models, markets, strategies and operating platforms to deliver enhanced value to the shareholders of the combined entity.
The proposed transaction would create a global SaaS IoT provider, and with a combined base of about 1.7 million connections, achieve significant scale and enhance its data ingestion strategy, they said.
The geographies served by MiX and PowerFleet would also reduce the merged company’s proportionate exposure to developing markets, thereby mitigating foreign currency risks and creating opportunities for accelerated market penetration through cross-selling and upselling into various geographies.
Simplifying the capital structure (including redeeming the PowerFleet Series A convertible preferred stock), was expected to enhance liquidity and enable improved access to capital, underpinning the financial stability of the new company, the companies said.
In its first quarter to June 30, MiX reported 40 500 net subscriber additions, bringing the total base to more than 1 040 00 subscribers. Revenue was up 15% year-over-year to $36.4m. Subscription revenue increased 16% to $32.2m. Net income increased to $1.6m, up from $0.7m in the prior year.
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