MiX Telematics tying up PowerFleet deal

MiX Telematics will stop trading on the JSE and New York Stock Exchange (NYSE) in less than two weeks after fulfilling all conditions for its planned merger with US-based internet of things (IoT) specialist PowerFleet.

The move is intended to expose its business to a bigger market and larger pools of investor capital. In October, the Midrand-based fleet management and vehicle-tracking company announced 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.

The company said on Friday that all outstanding scheme conditions required to be fulfilled or waived by the condition date as set out in the scheme circular, had been fulfilled or, to the extent required and permitted in terms of the scheme, were waived by the parties.

The scheme “is now unconditional and the takeover regulation panel has issued the compliance certificate in respect of the scheme”, the company said in a note to shareholders.

The company, with a market cap of R5.17bn, recently surpassed 1-million 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 2024’s first quarter, after 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. With the scheme now in effect, the final parts of the process are expected to be finalised by April 3.

The last day to trade in MiX Telematics shares on the JSE will be on March 25.

Trade in the shares will be suspended on March 26 on the JSE and for the company’s American depository shares on the NYSE. Also on March 26, PowerFleet shares will be admitted on the JSE’s main board as a secondary inward listing with the alpha code “PWR” and short name “Power”.

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 in adjusted earnings before interest, tax depreciation and amortisation (ebitda) and combined service gross margins of 67%.

MiX’s share price was unchanged on Friday at R8.50, bringing its gains so far this year to almost 41%.