Asset management solution provider I.D. Systems Inc. has landed $50 million in venture funding and announced plans to acquire an Israeli telematics and mobile internet of things (IoT) firm for $140 million, creating a new, merged company that will support a "connected vehicle strategy" that optimizes the in-car and fleet-management experience, executives said Wednesday.
I.D. Systems will acquire Rosh Ha'ayin, Israel-based Pointer Telocation Ltd. and merge with it to create a new firm called PowerFleet Inc. once the deal closes later this summer. The combination is intended to create "cross-selling" opportunities, allowing I.D. Systems to sell its solutions internationally through Pointer's Cellocator division, while Pointer brings its solutions to the North American market through I.D. Systems' enterprise and SMB distribution channels, the company said.
The combined PowerFleet will also help leverage Pointer's connected car and light-duty truck solutions by joining its platforms and solutions with I.D. Systems' technology portfolio, helping to "fast-track" the goal of an economy where all vehicles are networked and connected, the firms said. This is the latest move by I.D. Systems to continue its growth spree, following its 2019 acquisition of Atlanta-based telematics provider CarrierWeb and its 2017 purchase of Tampa, Fla.-based forklift management product manufacturer Keytroller LLC.
PowerFleet will have $131 million of annual revenue, based on a list of more than 500,000 monthly subscribers that is expected to grow to 600,000 by the end of 2019, according to I.D. Systems. The new company is expected to be listed on both the Nasdaq and the Tel Aviv Stock Exchanges.
In financing for the deal, Woodcliff Lake, N.J.-based I.D. Systems secured a $50 million "strategic growth equity investment" from Abry Partners and a $30 million term loan and $10 million revolving credit line from Bank Hapoalim. Both deals will close at the same time as the Pointer acquisition.
The new PowerFleet entity will be led by I.D. Systems CEO Chris Wolfe and I.D. Systems CFO Ned Mavrommatis. Pointer CEO David Mahlab will serve as CEO International and as a member of the PowerFleet Board of Directors, assisted by Pointer CFO Yaniv Dorani, who will serve as Deputy to the CEO International. Meanwhile, Abry Partners Managing Partner John Hunt and Principal Anders Bjork will also join the PowerFleet board of directors.
"[The acquisition] combines our market and product leadership in North America with Pointer's technology leadership, supply chain acumen and broad international footprint," said Wolfe, who noted that the two companies have already been co-developing products during a two-year strategic working relationship.
"By unifying our businesses, we plan to create significant operational, technological and go-to-market synergies, which will enable faster time-to-market of revenue generating new products and features... Together, I.D. Systems and Pointer will join a select group of IoT companies with more than 500,000 subscribers, and have the added benefit of being vertically integrated, unlike others in the market," Wolfe said.
Pointer Telocation provides telematics and mobile IoT solutions to the automotive, insurance and logistics industries. Pointer's cloud-based, software-as-a-service (SaaS) platform extracts, captures, and analyzes data from an organization's mobility points, including drivers, routes, points-of-interest, logistics network, vehicles, trailers, containers, and cargo.
"We've followed the transportation and logistics industry for years, and recognized the need for a global, vertically-integrated IoT telematics company with an end-to-end software and solutions offering," Abry Partners' Hunt said in a release. "The combination of I.D. Systems and Pointer fills that gap perfectly, and we look forward to working closely with the leadership team to scale the business to an even higher level of growth and profitability."