Hi Strawthatbroke.

That excellent update is a verbatim update from Maven funds.

Im not sure how it got on to Simply wall st, but given Maven is a paid service I feel Strawman should probably ask Matt Joass whether he approves of its being reproduced in this arena.

Don’t want to sound all sniffy about it but even if he is cool with it being copied onto this site, at least the attribution should be correct!!

In answer to the debt issue raised by @shapeshifter. The following comes from the Independant report from Grant Samuel.

EROAD had a net cash position of $22 million on 31 March 2021, which comprised banking facilities with a limit of $64 million drawn down to $35 million and cash at bank of $57 million. To partially fund the cash cost of the Proposed Transaction (including $4.5 million of transaction costs) EROAD plans to raise $80.5 million of new equity by placing shares to institutional investors and a Share Purchase Plan (SPP) to retail investors.

EROAD’s management are projecting net debt to a peak of ~$50 million in 18 to 24 months, which largely reflects the investment in revenue growth that is predicated on ongoing investment in research and development and hardware purchases for client installations. The forecast capital requirements can be serviced by EROAD’s existing banking facilities which mature on 31 March 2023.

and

If the Proposed Transaction is implemented EROAD will pay $77.8 million in cash on settlement, with $14.5 million held as Contingent Consideration. To fund the Proposed Transaction, EROAD plans to raise $80.5 million by placing shares to institutional investors and via a SPP to retail investors. Based on the financial position at 31 March 2021, on settlement EROAD will have net cash of $20.4 million. If the Contingent Consideration is paid EROAD would have a net cash position of $5.9 million

Debt service will be about 2.5mill pa, if I have read this correctly.

So should be quite do-able, as combined entity will be ~ cash flow neutral. Coretex have recently had a big upgrade to their tech which Eroad will be able to adopt, so hopefully reducing R&D spend which was running pretty high. 

Guess we will have to see how much they spend on sales and marketing to compete against the big boysin N America.

DISC - I hold and applied to for maximum number of shares in the offer.

Market Release 9 April 2021 EROAD signs Australian Enterprise Customer
Transportation technology services company EROAD Limited (NZX/ASX: ERD) (EROAD) today announces that it has signed its largest Australian enterprise customer, Ventia.
Ventia is one of the largest essential services providers in Australia and New Zealand, specialising in the long-term operation, maintenance, and management of critical public and private assets and infrastructure for corporate and government clients across a broad range of sectors.
Ventia has entered into a five-year agreement for a monthly subscription of EROAD’s SaaS products and intends to install approximately 2,500 Ehubo 2 devices in their Australian fleet with a further 1,500 in their New Zealand fleet. The agreement does not however specify any minimum unit commitment. It is anticipated that these Ehubo units will be installed throughout the 2021 calendar year.
EROAD entered the Australian market in 2018 and has been building its brand on the back of regulatory reform which has provided a significant low-cost growth option. As at 31 December 2020 EROAD was providing monthly subscriptions to small-to-medium customers with 2,625 connected units. This agreement will almost double EROAD’s presence in the Australian market, with a remaining short to medium term enterprise pipeline of some 15-20,000 connected vehicles.
“EROAD is pleased to announce that Ventia, an existing New Zealand customer for a number of years, has chosen to come on board as an Australian enterprise customer as well as significantly increasing the size of its New Zealand fleet utilising EROAD services. EROAD is looking forward to working in partnership with Ventia to deliver best safety outcomes” said EROAD’s CEO, Steven Newman.
 Ventia’s Group Chief Executive Officer, Dean Banks said “Safety and health above all else is our number one priority at Ventia. We are delighted to enter this strategic partnership with EROAD, which will enhance our ability to improve safety for our people, our clients and the communities we operate in.”
Ends