Tire maker Michelin said it plans to purchase Sascar, a Brazilian fleet tracking and freight security company, for about $717 million.
The transaction, which is subject to approval from Brazilian competition authorities, was valued at 1.6 billion Brazilian reais, consisting of the purchase price of 1.353 billion reais (about $606 million) and 247 million reais ($111 million) in debt.
Sascar, which offers real-time truck monitoring and stolen-vehicle recovery technologies, has a “strong presence” in Brazil’s independent trucker and small truck fleet segments, the buyer said. The company provides fleet management services for 33,000 fleets with 190,000 trucks.
Michelin said the acquisition would enable it to expand its service offerings for truckers and accelerate the growth of its truck-tire business in Brazil.
“Michelin will benefit from the client base and technical and marketing skills built up by Sascar in the rapidly expanding telematics market for professional truck fleets and thereby accelerate the development of services for its customers worldwide,” Michelin Group CEO Jean-Dominique Senard said in the June 9 announcement. “This will help us strengthen an important area of growth for the Group.”
Sascar, based in São Paulo, has 870 employees and generated revenue of 280 million reais in 2013 with average growth of 16% during the past three years.