EROAD closed its deal to acquire 100% of Coretex, expanding the telematics provider's connected base to 199,156 units globally.
Coretex, a telematics solutions provider in North America, Australia, and New Zealand, offers compliance and fleet management solutions to more than 60,000 connected vehicles in the construction, mixed fleet, and waste and recycling industries. EROAD, which employs more than 300 staff across New Zealand, Australia, and North America, expects the acquisition to advance its position as a global telematics provider and help reach its goal of 250,000 global units.
Following New Zealand Commerce Commission's decision to grant clearance for the acquisition on Nov. 17, the combined entity is poised to increase EROAD's share in the North American market.
Under the terms of the acquisition, an upfront consideration of $107.2 million was finalized, with a remaining $20.8 million in contingent consideration (payable in fiscal year 2023, subject to Coretex achieving certain performance milestones).
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"We have consistently stated that acquisitions would be part of our global growth strategy. To accelerate growth, any acquisition target needed to deliver increased capability, improved customer experiences, and access to additional market verticals," Steven Newman, CEO of EROAD, said in a statement. "In Coretex, we have found a highly complementary partner which allows us to satisfy these criteria, with the combined organization bringing the expertise and scale to deliver against market demand, faster."
Specifically in the North American market, EROAD said it strengthened its position as a supplier of in-vehicle management solutions and trailer telematics. Coretex's portfolio of products, solutions, and services will open new avenues for growth in vertical markets, including construction, mixed fleets, as well as waste and recycling, according to EROAD.
"Coretex excels in thinking through the needs of the customer within the frame of the supply chain by taking an end-to-end vertical industry approach," Casey Ellis, president of EROAD North America, said in a statement. "Balance this against integration of their next-generation hardware into EROAD's broad regulatory product suite and it creates an advanced market fit. We're also identifying a new set of short- and long-term strategic goals with an immediate upside for faster growth, particularly in the North American market."
The combined entity is undertaking strategic planning to build on the rationale identified in the business case for the acquisition, intending to complete the integration within the next 12 to 18 months.
Coretex CEO Selwyn Pellett was named executive director of the EROAD Board and adviser to Steven Newman, EROAD's CEO.
