GPS tracking and telematics specialist Omnitracs is to acquire XRS Corporation, a mobile fleet optimisation software firm, for about US$178m. Privately-held Omnitracs is offering US$5.60 per XRS share, a premium of 85% on the company’s share price…
GPS tracking and telematics specialist Omnitracs is to acquire XRS Corporation, a mobile fleet optimisation software firm, for about US$178m.
Privately-held Omnitracs is offering US$5.60 per XRS share, a premium of 85% on the company’s share price prior to the announcement.
The merger agreement was unanimously approved by the board of directors of XRS, and shareholders representing 68.1% of the company, including Trident Capital Fund and Technology Crossover Ventures, have agreed to vote in favour of the deal.
Omnitracs will fund the acquisition, which is expected to close in the fourth quarter of 2014, through a committed financing facility from Royal Bank of Canada, Credit Suisse and Guggenheim.
Formed in 1985, XRS delivers software solutions that help trucking companies manage their fleets and comply with regulations. The company has over 1,300 customers, representing more than 110,000 active truck subscriptions.
In its recent third quarter fiscal 2014 results, XRS reported a slight year-on-year fall in revenue from US$13.4m to US$12.8m. The company, which is debt free, put this down to its ongoing transition from its legacy hardware-based solutions to its mobile solutions. Revenues in the latter grew by 19% year-on-year. GAAP net income for Q3 was US$0.1m.
Commenting on the acquisition, John Graham, CEO of Omnitracs, said: “This agreement to purchase XRS represents another milestone in the renewed growth of Omnitracs and further demonstrates our continued commitment to retaining and advancing our position as the leading software provider within the transportation and logistics industry.”
Omnitracs was spun out of chipset maker Qualcomm in a US$800m cash deal in August 2013. With the backing of its private equity owner, Vista Equity Partners, the company has since made a series of bolt-on acquisitions, including the December purchase of Roadnet Technologies, a provider of fleet management software solutions to private fleets. Other previous acquisitions include Sylectus and FleetRisk Advisors, which is now Omnitracs Analytics.
Jefferies acted as financial adviser to Omnitracs on the transaction with Kirkland & Ellis its legal counsel. William Blair was financial adviser to XRS and Faegre Baker Daniels its legal adviser.
