CI, Matrix to merge
24 May 2007
In a deal that will see Control Instruments (CNL) unbundling an estimated 650 million rand to its shareholders, the group has entered into a 50:50 agreement with Matrix to merge its worldwide fleet and vehicle management interests with Matrix Vehicle Tracking and list the combined business on the JSE.
Speaking at the announcement on Wednesday, Control Instruments Group MD Richard Friedman said the group intended to unbundle the majority of the shares it received in the merged entity to its shareholders.
This is in line with the group’s strategy to unlock the underlying value in the business for the benefit of shareholders.
Friedman said the new business has a global footprint with a subscriber base of more than 165,000 vehicles and an installed base of over 300,000 onboard computers worldwide, leading technology in every one of the fields in which it operates and a strong history of operating successfully in international markets.
He added that Control Instruments and Matrix also have a long history - Control Instruments was one of three original investors in the 1995 start-up of Matrix and since then the two businesses have kept in close contact.
With the convergence of vehicle tracking and fleet management technology, merging the two businesses is a logical step and combines Matrix’s substantial existing annuity revenue stream and largest fleet of GSM linked vehicles in the country with CI OmniBridge’s state-of-the-art technology platform and product development capability as well as its international distribution network, which it has developed and operated successfully for the past ten years, he said.
The two businesses operate in different sectors of the fleet telematics market, which creates many synergistic opportunities and sets up the new business to focus into all levels of fleet telematics - globally.
The new listed company will have operations in South Africa, the USA, the United Kingdom and Germany. CEO will be Stefan Joselowitz, the current managing director of Matrix and the executive team will include Charles Tasker, managing director of CI OmniBridge; Terry Buzer, an executive director of Control Instruments since 1987 and Riette Botha, the chief operating officer of Matrix.
Conditions precedent include Reserve Bank and Competition Commission approval as well as Control Instruments’ shareholder approval.
Friedman pointed out that the "left behind" Control Instruments business still had a lot to offer. With projected revenue close to one billion rand, as a result of the aggressive acquisition drive that the Group had embarked on over the past two years, this business had critical mass and would be focused on components and products for the automotive OEM market and aftermarket.
I-Net Bridge
http://www.sundaytimes.co.za/Business/Article.aspx?id=472557
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