5G mobile and fixed wireless solutions provider, Inseego (NASDAQ: INSG) enters into a definitive agreement to sell its fleet management and telematics business in an all-cash transaction for $52 million. As per the terms of the agreement, the investment management firm Convergence Partners will acquire Inseego’s remaining telematics business operational across the UK, the EU, Australia and New Zealand.
The decision to divest its fleet management and telematics operations is focused to align Inseego’s business with its North American-centric 5G wireless solutions business and the company’s previously stated goal to continue to significantly de-leverage its capital structure. The sale of the telematics operations further supports Inseego’s streamlining of its focus and resources on the strongest growth opportunities around its core product offerings.
“The sale of our remaining telematics operations is part of our continued improvements in strengthening Inseego’s balance sheet and ensuring that we are well-positioned and focused on the growth of our 5G business,” said Inseego Executive Chairman, Philip Brace. “The sale proceeds will enable us to repay in full our existing short-term debt, complete the restructuring of our Convertible Notes, and add to our strong liquidity position, all while helping us to focus on addressing our growing 5G pipeline,” added Brace.
The purchaser is an affiliate of Ctrack Africa, a telematics business that was historically part of Inseego’s telematics portfolio, which it sold to Convergence in a previous transaction in 2021. Upon completion of this sale, the re-unified telematics business under Ctrack will operate on a global technology platform and at scale, with customers and employees benefitting from being part of a larger organization that specializes in and is focused on telematics and driving growth in the business.
The transaction is subject to receipt of customary closing conditions and is expected to close early in the fourth quarter of 2024. The initial purchase price is subject to various working capital and other customary adjustments.
Inseego also announced that there was no change to its financial guidance provided for the third quarter of 2024, ending September 30, 2024.
Raymond James & Associates, Inc. served as financial advisor and Greenberg Traurig, LLP served as counsel to the Company in connection with the transaction.
