Omnitracs’ purchase of SmartDrive, announced early Wednesday, is going to create a “new, converged category” by putting together the video services of SmartDrive with Omnitracs’ current telematics capabilities.
That was the description of the value of putting the two companies together in a deal whose price tag is unknown.
Talking about convergence is nothing new at SmartDrive. In a video interview last year, SmartDrive CEO Steve Mitgang used that term to discuss his company’s strategy.
Responding to a series of emailed questions on Wednesday, a spokeswoman for Omnitracs did not disclose the size of the deal. But she said the acquisition is one of the largest in the history of Omnitracs, which has been around for more than 30 years.
Although SmartDrive has sought to move into other applications beyond the video systems it is known for, the output produced by its cameras and sensors was at the heart of what Omnitracs was buying in acquiring SmartDrive.
Omnitracs does have an in-cab video service as part of its offerings, “but with the addition of SmartDrive’s robust insights and data, the acquisition was a strategic move to eliminate data silos and unite the fragmented transportation technology industry,” Omnitracs said in its emailed responses. “This acquisition unites one of only two players in the video safety space with a market leader in telematics, truly enabling us to create a new, converged category.”
That echoed what Omnitracs said in its prepared statement announcing the acquisition: “The combined company will deliver the most complete and intelligent [driver experience] with the right in-cab and back-office decision making, alerting, and driver coaching, a virtual co-pilot that will lead to significant safety, fuel efficiency, operational and financial gains for fleets.”
Whether the companies have overlapping customer bases, which could impact such activities as sales and support, the email response from Omnitracs said it was “too early in the process to share details on this at this time.”
Omnitracs said it had no cooperative agreements with SmartDrive on the use of its data from video prior to the acquisition.
The current SmartDrive management, however, is going to remain with the company, according to Omnitracs. “We value the expertise that SmartDrive’s leadership team and employees bring to the table,” the company said in its email responses. “Our intent is to keep the current leadership team in place.”
Rather than just record incidents, SmartDrive has long touted its system also as an educational tool, one with which fleet managers could rapidly see improper driver behavior or reaction to something on the road and quickly coach drivers about what they did wrong.
That feature was touted by Omnitracs as one of the reasons for the acquisition. “SmartDrive brings data on 300,000 risky driving events together with Omnitracs-owned data to provide insights at scale that will ultimately help drivers make better and safer decisions while on the road,” Omnitracs said in its email responses. “Not only that, drivers will also receive real-time alerts and counsel — information they need, but don’t always receive when they need it.”
As a private company, financial data on Omnitracs is not readily available. However, in a review of its debt last year, Moody’s said Omnitracs’ revenue in 2019 was $465 million. In a separate debt review, S&P Global Ratings said it expected Omnitracs’ free cash flow to be $23 million to $28 million this year, down significantly from the $58.5 million it generated last year.
Omnitracs’ fiscal year runs through Sept. 30.
More articles by John Kingston
Omnitracs, Trimble integrating systems
Lawsuit sheds light on aborted Omnitracs deal
Tech battle: Omnitracs claims Platform Science infringed on its technology patents
