DigiCore changes hands for R1.09bn
Novatel offered R4.40 a share
CALIFORNIA-based company Novatel Wireless has bought vehicle tracking technology company DigiCore for R1.09 billion.
Novatel offered R4.40 per share from the R2.62 per share 30-day volume weighted average traded price, higher than a previous offer of R4 per share made in early June.
The DigiCore share price rose by 50c on Friday to close at R4.10.
Full package
“The companies complement each other, we are big on software and they are big on hardware, so this will now allow us to sell the full package,” DigiCore chief executive Nick Vlok said in an interview with Business Report.
He said the deal brought about an opportunity for new products such as the Metro Information Services Incorporated (Misi) system, a hot spot technology you could also communicate through, which he said DigiCore would now avail in South Africa and the global market.
Nasdaq-listed Novatel said it believed the acquisition, which is expected to be completed in August, “would establish Novatel’s position as a significant player in the global asset tracking and management market, and would provide immediate top-line contribution and meaningful earnings contribution in 2016”.
Vlok said other tangible benefits of the deal came from the complementary nature of both companies, for example, that Novatel had a financial competitive advantage in the manufacture of black boxes it built cheaper along with a number of electronic compo- nents that would provide significant economies of scale for DigiCore’s software input.
He said he was confident that the new scale of operation for DigiCore would lead to the creation of additional jobs, but had not quantified it as yet.
DigiCore competes with other listed companies such as MiX Telematics, which is also listed in the US, Cartrack and Altron-owned Altech Netstar.
“As for leapfrogging the competition, only time will tell,” Vlok said.
In 2010 DigiCore announced R14 million worth of work on an electronic payment card system for the taxi industry in North West which was co- owned by the North West Taxi Association.
According to a Stock Exchange News Service (Sens) announcement on Friday, Novatel is a leader in the design and development of M2M wireless solutions based on 3G and 4G technologies.
Innovative products
Novatel delivers Internet of Things and Cloud SaaS services to carriers, distributors, retailers, OEMs and vertical markets worldwide.
Product lines include MiFi Mobile Hotspots, USB modems, Expedite and Enabler embedded modules, Mobile Tracking Solutions and Asset Tracking Solutions.
These innovative products provide anywhere, anytime communications solutions for consumers and enterprises.
DigiCore specialises in the research, development, manufacturing, sales and marketing of telematics tools used for fleet management and consumer and enterprise-level vehicle tracking for an international client base. – Additional reporting ANA.