Telematics provider Trakm8 has conditionally agreed to acquire routing software provider Route Monkey for a consideration of up to £9.1 million.

The acquisition is in line with Trakm8's strategy of combining organic growth with selective acquisitions that expand its telematics offering to both insurance and fleet customers.

Trakm8 plans to integrate Route Monkey’s algorithms and related software into its telematics solutions and said that the acquisition will bring a number of benefits:

• Route Monkey adds new and complementary technology capability to Trakm8 in the field of fleet route planning, including a capability for electric vehicles.
• Trakm8 will integrate Route Monkey’s algorithms and related software into Trakm8’s telematics and camera solutions to provide an enhanced service offering.
• Trakm8’s existing Logistics solution, which organises orders, jobs and deliveries, will benefit from a dynamic optimisation enhancement which Route Monkey provides.
• Trakm8 provides Route Monkey with access to its larger customer base and sales force.

In the year ending December 31, 2014, Route Monkey recorded revenues of £1.7 million and profit before tax of £700,000. Net debt was £500,000 at the year end, with net assets of £1.2m.

Route Monkey will continue to be based in Livingston, Scotland while retaining its small offices in Gateshead and Amsterdam. It currently has 23 employees (including six engineers and five sales people) and senior management are being retained.

Trakm8 will continue to develop the Route Monkey brand and will undertake an integration plan for both the product and engineering “to combine the best of both companies”, Trakm8 said.

The acquisition will be funded through a combination of a drawdown of new Trakm8 debt facilities, a placing of 1,801,802 new ordinary shares of one pence each in the company at a price of 333 pence per placing share to raise £6m and 184,441 new ordinary shares being issued as part of the consideration to the senior management shareholders of Route Monkey.

John Watkins, executive chairman of Trakm8, said: “The acquisition of Route Monkey is highly complementary to Trakm8 as it adds route planning and optimisation capability to our existing technology, a key to enabling us to offer integrated solutions to customers in line with the development of market requirements.

“We look forward to welcoming the Route Monkey team into the growing Trakm8 group and expect the business will add another source of organic sales growth and recurring revenues.

“Together the acquisitions of Route Monkey and DCS significantly enhance Trakm8’s competitive advantage, add substantial growth opportunities, and are expected to be earnings enhancing.”