MiX Telematics close to completing merger

MiX Telematics is one step closer to completing a merger with US-based internet of things (IoT) specialist PowerFleet, after receiving approval from competition authorities.

The move is meant to expose its business to a bigger market and larger pools of investor capital.

In October, the Midrandbased company announced plans for a merger with PowerFleet that will see it delist from the JSE, joining tech rivals such as Jasco, Adapt IT, Alaris, Etion and Alviva over the past two years.

On Tuesday, the fleet management and vehicle-tracking company told investors that the Competition Commission had granted merger approval in respect of the proposed transaction, “subject to certain conditions acceptable to the parties”.

The approval was granted on February 14.

The scheme remains subject to the fulfilment or waiver of the remaining conditions, as set out in a circular in 2023.

“Shareholders will be provided with a further update regarding the fulfilment or waiver, as the case may be, of all of the scheme conditions via Sens in due course,” MiX said.

ENLARGED BASE

The company, with a market cap of R3.74bn, recently surpassed 1million subscribers.

The merger with PowerFleet will take that to a combined 1.7million and the companies are confident the enlarged base will “provide immediate scale” for the new entity.

The deal had been expected to close in the first quarter of 2024, on which the combined business will be branded as PowerFleet, with its primary listing on the Nasdaq.

PowerFleet intends to have a secondary inward listing on the JSE.

MiX derives the bulk of its revenue from helping companies and businesses manage vehicle fleets.

The combination with PowerFleet is expected to create a business with total revenue of $279m (R5.3bn), $39m of adjusted earnings before interest, tax depreciation and amortisation (ebidta) and combined service gross margins of 67%.

MiX’s share price gained 0.49% on Tuesday to R6.16, bringing its gains so far this year to about 12%.