Pointer Telocation Systems Ltd. (Nasdaq:PNTR; TASE:PNTR) has acquired a fleet services management company in Southern Brazil. Pointer will pay $6.5 million (about BRL 21 million) in cash for Cielo Telecom, which manages fleet customers covering 16,000 trucks.
Cielo, founded in 1994, has a strong presence in the Brazilian truck sector. It has a comprehensive set of software and application tools for vehicle monitoring, driver behavior management, driver working hour management, including a wide range of blocking, tracking and telemetry devices for vehicle security control.
Planned share offering
Pointer's controlling shareholder is chairman Yossi Ben-Shalom and Barak Dotan's DBSI private investment company, with a 30.4% stake. Further shareholders are The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) (16.7%), Yehudit Yuval Recanati's Gandir Investments (10.2%), and financial institutions from Israel and the US.
Pointer is traded on TASE and NASDAQ, at a market cap of $53 million, after a 14% share price hike in the past year. Two months ago, the company published a shelf prospectus for an offering of up to $25 million in shares, options, rights or debt.
The company, which has recently spun off Shagrir Group Vehicle Services Ltd. (TASE: SHGR), has reported a 4.7% rise in revenue, to $16.2 million, in the second quarter of 2016, compared with the corresponding quarter. In first half of 2016, revenue totaled $31 million, unchanged from the corresponding period in 2015. Net profits were $876,000 in the second quarter, and $2.3 million in the first half of 2016, a decline compared with the corresponding periods. Non-GAAP profit jumped 9.8% in the second quarter to $1.5 million, but declined 6.8% in the semi-annual results, to $3.3 million.
Pointer CEO David Mahlab said, "This acquisition will expand our customer base and enable us to better penetrate the southern part of Brazil and participate actively in the fleet management sector. Given our existing infrastructure in Brazil, we see strong synergistic potential from the combination of the newly acquired business with ours, and we expect the acquisition to be accretive as of the first day." Mahlab added, "This is another step in the execution of our global expansion strategy, following the acquisition of our South African subsidiary two years ago. This strategy combines organic growth and M&A."
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2016
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