Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


ERoad to raise $49.5 million in pursuit of US growth

ERoad to raise $49.5 million in pursuit of US growth

By Suze Metherell

July 18 (BusinessDesk) - ERoad, whose products allow transport companies to manage and pay road user charges and keep track of their fleet, is looking to raise up to $49.5 million in an initial public offer next month as it chases growth in the US market.

The Auckland-based company will sell between 13 million and 15.7 million shares at an indicative price range of $3 to $3.80 per share, of which $40 million will be new capital, with existing shareholders selling between 2.4 million and 2.5 million shares and keeping about three-quarters of the business, according to its prospectus lodged with the Companies Office. The indicative price range would value the company at between $180 million and $228 million.

The new capital will be used to pay off $3 million in bank financing and fund the company's expansion into the US, targeting Oregon, where it commercially launched in April. EROAD has also entered the Australian market. It might also look at new markets via acquisitions.

"ERoad’s transition to a publicly-listed company represents the next step on its path to becoming a global technology leader," said chairman Michael Bushby in a letter to potential shareholders. "ERoad has a highly-scalable technology platform and robust business model, now supported by a further international reference site in the United States."

Founded in 2009, the company has developed GPS software and hardware which allows logistics companies to track their fleet and manage and pay road user charges.

The business first turned a profit of $2.9 million in the year ended March 31, 2014 on sales of $10 million. It forecasts revenue to rise to $19 million in the 2015 year and to $34 million the following year, according to the prospectus. Eroad expects to report a loss of $1 million in 2015 due to listing costs of $2 million, before returning to profit of $5.5 million in 2016. ERoad is also predicting a drop in its retention rate, from 99.3 percent, to 96.5 percent over the next two years.

The company doesn't anticipate paying dividends over the forecast horizon, with surplus funds kept "to capitalise on immediate and future market growth opportunities."

The final price is expected to be announced on July 29, with a listing on Aug. 15. The offer opens on July 30 with a preference pool closing on Aug. 6 and the broker firm offer closing on Aug. 12. The IPO won't have a public pool.

First NZ Capital is the sold lead manager of the offer and Deutsche Craigs is the co-manager.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news