I.D. Systems, Inc. (NasdaqGM:IDSY) entered into a definitive agreement to acquire Pointer Telocation Ltd. (NasdaqCM:PNTR) for approximately $140 million on March 13, 2019. Pointer shareholders will receive $8.50 in cash and 1.272 shares of I.D. Systems common stock for each share of Pointer common stock, taking the offer to approximately $16.44 per share. Under the terms of the transaction, each award of restricted stock units of Pointer Telocation that is outstanding and vested immediately prior to such time will be cancelled in exchange for the right to receive $8.50 in cash and 1.272 shares of I.D. Systems common stock for each share of Pointer common stock. This will imply approximately $72 million consideration being paid in cash and approximately 11 million shares of I.D. Systems being issued.

The transaction will be funded through a $30 million debt financing by Bank Hapoalim. This is comprised of two term facilities in the aggregate principal amount of $20 million and $10 million. The proceeds of the Term Facilities may be used solely to finance a portion of the cash consideration. Additionally, a five-year revolving credit facility to Pointer in an aggregate principal amount of $10 million. After the closing of the transaction, the combined business will be rebranded PowerFleet, Inc. Pointer Telocation and Cellocator brands will continue as the international go-to-market brands. In case of a termination, I.D. Systems may be required to pay a termination fee in the amount of $2 million to Pointer Telocation and Pointer Telocation may be entitled to a termination fee in the amount of $3 million to I.D. Systems.

I.D. Systems Chief Executive Officer, Chris Wolfe, and Chief Financial Officer, Ned Mavrommatis, will lead combined company with Pointer Chief Executive Officer, David Mahlab, to serve as Chief Executive Officer International, while Pointer Chief Financial Officer, Yaniv Dorani to serve as Deputy to Chief Executive Officer International. The transaction is subject to customary closing conditions, including approval by the stockholders of I.D. Systems and Pointer, obtaining all governmental authorizations, effectiveness of the registration statement on Form S-4, obtaining Israeli securities law exemptions, the listing of I.D. Systems common stock on Nasdaq, approval of any material competition law, Pointer Telocation shall have not less than $3 million in cash and cash equivalents, execution of registration rights agreement and has been unanimously approved by the Boards of Directors of both companies. The registration statement was declared effective by the SEC on July 25, 2019. The transaction has been approved by the shareholders of Pointer Telocation and I.D. Systems, Inc. on August 29, 2019. The acquisition is expected to close in the summer of 2019. As of May 23, 2019, the transaction is expected to close in the third quarter of 2019. As of August 29, 2019, the completion of the acquisition remains subject to certain regulatory approvals and certain other customary closing conditions and is expected to occur in October 2019. As of October 2, 2019, Pointer Telocation Ltd. and the other parties to the Agreement and Plan of Merger, by and among Pointer, I.D. Systems, Inc., PowerFleet, Inc., Powerfleet Israel Holding Company Ltd., and Powerfleet Israel Acquisition Company Ltd. anticipate that the closing of the transactions contemplated under the Merger Agreement shall take place on October 3, 2019. The last day that the Pointer ordinary shares will be traded on the Nasdaq Capital Market is October 2, 2019. On October 3, 2019, contingent upon the closing of the transactions contemplated under the Merger Agreement, the PowerFleet, Inc. common stock will commence trading on the Nasdaq Global Market. The PowerFleet shares of common stock are expected to commence trading on the TASE on October 6, 2019, provided that the consideration payable to the Pointer shareholders whose ordinary shares are traded on the TASE shall have been received by the TASE account by October 4, 2019.

The acquisition is expected to be accretive to non-GAAP earnings per share (EPS) in first 12 months following the closing. Canaccord Genuity acted as financial advisor while Jeffrey S. Spindler of Olshan Frome Wolosky LLP and Adam Klein and Danny Dilbary of Goldfarb Seligman & Co. and Steven E. Siesser and Steven M. Skolnick of Lowenstein Sandler LLP acted as legal advisors to I.D. Systems. I.D. Systems agreed to pay Canaccord Genuity a fee of $350,000 for its services, plus a fee equal to $1.8 million which is contingent upon consummation of the transactions. Roth Capital Partners, LLC charged $0.24 million and Alliance Advisors charged $7000 to Pointer Telocation. ROTH Capital Partners acted as financial advisor while Shy S. Baranov and Howard Berkenblit of ZAG-S&W LLP acted as legal advisor to Pointer. Alliance Advisors LLC assist in the solicitation of proxies for the Pointer Telocation. Steven Stokdyk of Latham & Watkins acted as legal advisor to Canaccord Genuity. D.F. King & Co., Inc. acted as information agent for I.D. Systems for an initial fee of $65000.

I.D. Systems, Inc. (NasdaqGM:IDSY) completed the acquisition of Pointer Telocation Ltd. (NasdaqCM:PNTR) on October 3, 2019. The new combined company will be rebranded as PowerFleet, Inc. and will trade on the Nasdaq Global Market and Tel Aviv Stock Exchange (TASE) under the ticker symbol “PWFL”.