EROAD has closed the deal to acquire 100% of Coretex Limited following New Zealand Commerce Commission’s decision to grant clearance for the acquisition on Nov. 17, 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% to 20% between 2021 and 2026.
Under the terms of the acquisition, a payment of NZ$157.7 million (US$107.2M) in upfront consideration has now been finalized, with a remaining NZ$30.6 million (US$20.8M) 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, the company noted in a press release.
“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, the company says.
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. As of Dec. 1, Coretex CEO Selwyn Pellett joins 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.