Eroad raises funds to buy Auckland-based Coretex for $158m

GPS fleet tracking company Eroad has bought Auckland-based Coretex for $157.7m. Photo / 123RF

Dual-listed Eroad, which specialises in GPS fleet-tracking systems, said it had gone into a trading halt while it raised funds to buy Auckland-based Coretex, for $157.7m.

The deal involves an additional payment of $30.6m, contingent on Coretex meeting certain performance milestones.

Eroad said it was conducting an underwritten conditional placement to raise $64.4m and a share purchase plan to raise $16.1m to partly fund the purchase.

Coretex has connected units in North America, Australia and New Zealand, with a focus on less than a truck load (LTL), refrigerated transport, construction, and waste and recycling.

Eroad said Coretex had a well-advanced pipeline of North America Enterprise customers.

The acquisition is expected to complete in early in the second half of 2022 and is subject to conditions, including Commerce Commission clearance, Overseas Investment Office approval and Eroad shareholder approval.

The trading halt will remain in place until the earlier of an announcement by Eroad about completion of the placement capital raise, or market open on Thursday.

Eroad chief executive Steven Newman said the acquisition was "truly transformational".

"Accelerating our key growth metrics by two years in North America and Australia and positioning us to become a bigger player in the global telematics market.

"Combining Eroad's expertise in broadly adopted regulatory telematics solutions with Coretex's extensive vertical telematics expertise and products creates an advanced market fit."

Shares in Eroad last traded at $6.15, having gained 92.8 per cent over the past 12 months.