Powerfleet Announces Strategic Acquisition of Fleet Complete

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

Powerfleet, Inc. (Nasdaq: AIOT), a leading provider of AIoT SaaS solutions for the mobile asset industry, 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.

 

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