Masternaut is joining forces with UK competitor Cybit to create one of the world’s largest vehicle-tracking firms.
The deal is backed by a major US private equity firm and is believed to be worth up to £100m.
The new group, which will keep the Masternaut brand, will have more than 10,000 business customers across 32 countries and 500 staff.
Martin Port, the entrepreneur who set up Masternaut UK in Leeds in 2002, told the Yorkshire Post: “The idea is to create a worldwide business with the Masternaut name.”
The enlarged business will be led by Bill Henry, chief executive of Cybit, which is based in Huntingdon.
Mr Henry said: “The telematics market is undergoing rapid consolidation. With pan-European operations and the largest development team in the industry, Masternaut offers a clear choice for customers who want industry-leading products delivered by a strategic, long-term partner.”
Mr Port said Masternaut’s office in Leeds will be the operational centre to support the hosting, services and software for UK and Europe. The site, at Aberford, has 150 employees.
Mr Port is now considering his options for the future. The 48-year-old was the biggest shareholder in Masternaut UK until he sold the business to Europe’s second largest Airport group, Aeroports De Paris (ADP) in 2009, and yesterday’s agreement crystalises an earn-out clause from that deal.
He founded the UK business with hardware bought from French firm Masternaut International, and developed software in the UK which allowed for rapid growth of the business.
At the time of the sale to ADP, the UK company had an enterprise value of £20m.
Masternaut now tracks 160,000 vehicles in Europe, including 75,000 in the UK, while Cybit tracks 50,000. Combined, the businesses have recurring revenues of £100m and a staff of 500.
Francisco Partners, the new owner, specialises in technology investments and controls a fund worth $7bn. It bought Cybit in 2009. It also owns Discrete Wireless, a US telematics firm.
Deep Shah, a London-based partner at Francisco Partners, said: “Cybit and Masternaut have enjoyed great success as independent companies, and joining forces will introduce a new level of service excellence in the telematics industry.
“Global fleets want to manage their mobile workforces more effectively; we believe the new Masternaut fulfils an important role by providing the strategic direction that will embed telematics into a greater number of performance-driven businesses.”
The new owner believes that the marriage of Cybit and Masternaut “enables the strategic evolution of telematics from a tactical operational tool, to an enterprise-wide, information management solution from a single, cloud-based platform”. Cloud computing refers to the provision of software as a service via external hosting.
Mr Henry, the new CEO and a former executive at satnav firm TomTom, added: “By combining Cybit and Masternaut, we can innovate faster, increase our geographic reach, raise industry standards and bring customers compelling opportunities for improved business performance.”
According to Mr Port, every driver who claims mileage allowance will one day have a tracking system on their vehicle. He estimates that 600,000 units are currently installed on up to 2m vehicles doing business mileage in the UK.
He said: “It’s all coming of age. People have spoken about it for a long time. It’s now really happening. We are at a price point that makes it a no-brainer. Fuel is at a ridiculously high price.”
The service allows fleet managers to assess the environmental impact of their vehicles as well as safety and productivity of their drivers.
The new Masternaut group will probably be headquartered in London, said Mr Port.
Francisco Partners is linked to Sequoia Capital, one of Silicon Valley’s most prominent venture capital firms, which provided early stage funding to iconic companies such as Apple, Cisco, Google, Yahoo! Electronic Arts and YouTube.
The rise to prominence
Masternaut is one of the fastest-growing private technology firms in Europe.
In 2006, the firm acquired GE Mobile Solutions, now known as Three X Mobile Solutions, from US industrial giant General Electric.
In 2008, Masternaut bought Leeds-based internet service provider Fibre City, in a deal believed to be worth £6m, and Microsoft Gold Partner ICM Business Solutions.
Masternaut has won a number of business accolades over the last nine years, including the award for companies with turnover of between £10m and £50m at the 2008 Yorkshire Post Excellence in Business Awards.