Auckland-based tech firm Ivenco sells to US company for $127m
More staff to be hired as outdoor payment at fuel stops expands
The $127 million sale of Auckland-based tech firm Invenco is a “fair price” according to the company’s chief executive, who said the firm will continue to hire staff under its new ownership.
Invenco, co-founded by Sir Peter Maire, was sold to North Carolinabased Vontier for US$80M ($127m), it was revealed yesterday.
The firm was formed in 2009 by Maire and then chief executive Dave Ritten, after Maire bought the Invenco portion of the bankrupted Provenco Cadmus eftpos business.
The payment systems company has recently specialised in pay-at-thepump systems for service stations — thousands of which have been installed in service stations on US forecourts, as well as in NZ.
The sale price was just 1x annual revenue, according to a regulator filing by Vontier, but the US firm said the Kiwi firm’s shareholders were also in line for a possible, undisclosed, earn-out bonus if they hit financial targets.
“Invenco’s expected 2022 revenue of $80 million with mid-40 per cent gross margins enhances Vontier’s growth and recurring revenue profile. The purchase price for the acquisition is $80m plus additional, contingent consideration based on performance and the transaction is expected to close in the third quarter of 2022,” the filing said.
The deal comes as sales of chargeat-home or in-a-carpark electric vehicles are rising fast, and Z Energy and other service station operators are introducing systems that let customers pay using mobile apps.
Push for growth
Vontier, based in North Carolina, is listed on the New York Stock Exchange with a market cap just under US$4 billion.
The sale, expected to close in the third quarter, is subject to Overseas Investment Office approval.
“Upon closing, Invenco will be integrated within Gilbarco Veeder-root (GVR), leveraging GVR’S channel to market,” Vontier said in a statement. Vontier subsidiary GVR — also based n North Carolina — makes fuel dispensing and point-of-sale systems.
Current Invenco CEO John Scott told the Herald that the firm, which employs 320, was advertising for an- other 40 staff — “and that will prob- ably increase”.
“There will be no changes in management or staff [after the deal closes]. If anyone leaves, it will be because they want to,” Scott said.
“We actually hope GVR have some folks who can help us fill the gaps because the real war is for talent in tech.”
Invenco had captured nearly 100 per cent of the local outdoor payment market, Scott said, and was expanding fast in North America. US giant Costco is one of its clients.
Deals closed in the past few months with two of the world’s largest energy companies would see Invenco’s technology used at around 20,000 fuel stops in the US, or around 20 per cent of the market, Scott said.
“We value the company at significantly more than the sticker price [of US$80M] which speaks to the value of the considerations.”
Vontier was offering extra money if revenue targets were hit, and had committed to expanding Invenco’s business.
“I think we got a fair price,” Scott said.
“If we were just chasing the cash [we] could have simply gone down the IPO route, but we saw an upside with Vontier.
“We started raising money for growth in October 2021 but once we started talking to GVR it was clear they were the preferred owner.
“What we have now with GVR is hard for people outside of the industry to understand.
“GVR is in 150+ countries with a market share in 40 to 60 per cent range. Invenco is in 10 countries with market share ranging from 5 per cent to 70 per cent.
“The GVR channel play alone is enough reason for the deal.”
From its side, Invenco appealed to its new owner because of the technology it had developed in areas like the cloud and security, Scott said.
“We have 200 software engineers and only one marketing person. When we were doing due diligence we met with a number of the world’s largest energy companies. One memorable quote was ‘You have the tech of a billion-dollar company in the body of a $50m company’.”
I think we got a fair price.if we were just chasing the cash
[we] could have simply gone down
the IPO route, but we saw an upside with Vontier.
John Scott, Ivenco CEO
String of offshore sales
Invenco is the latest in a string of tech firms sold offshore over the past couple of years. Maire has a history of founding tech firms, selling them, then reinvesting the profits in New Zealand startups.
He is best know for Navman, the pioneering maker of in-car GPS systems that was sold to US firm Brunswick for around $104m in 2007. And in 2015, he sold Fusion Electronics, a maker of audio systems for boats, cars and campervans, to Nyse-listed Garmin for around $20m.
In between times, he put money into Nzx-listed Rakon.