I.D. Systems, Inc., a $36.8 million provider of mobile asset management technology and solutions for the Industrial Internet of Things, has agreed to acquire Keytroller, LLC, a manufacturer and marketer of a range of electronic products for managing forklifts, construction vehicles, and other industrial equipment, for $9 million. The deal is expected to close by the end of July 2017.
While the deal is by no means as large as some of the other material handling industry acquisitions of the recent past, it continues the trend of software firms merging with hardware manufacturers to significantly expand their product portfolio.
In 2016, Keytroller generated revenue of $6.6 million and adjusted EBITDA of $1.2 million. Beginning in the third quarter of 2017, Keytroller’s results will be included as part of I.D. Systems’ industrial truck management product line.
The two companies’ market positions and distribution channels are said to be complementary. I.D. Systems sells its flagship PowerFleet industrial truck management systems primarily to large global enterprises and through lift truck manufacturers, while Keytroller markets most of its products through a large network of lift truck dealers to small and medium-size end users. According to the companies, PowerFleet rarely competes head-to-head with Keytroller devices.
By combining Keytroller’s mid-range and economy products with PowerFleet, I.D. Systems intends to compete as a single source of fleet management technology for industrial truck owners and operators. The acquisition of Keytroller also gives I.D. Systems a new source of industrial truck usage data for its PowerFleet IQ analytics database, enhancing the value of that tool for multi-site enterprises.
“We are excited by our planned acquisition of Keytroller,” says I.D. Systems’ CEO Chris Wolfe. “Keytroller’s business complements our industrial truck management segment incredibly well, from product mix and market position to sales cycle and customer diversification. The acquisition should contribute immediately to I.D. Systems’ revenue and profitability, as well as position the company to achieve a more predictable, profitable revenue stream from a much more diverse customer base. We look forward to integrating Keytroller’s operations smoothly into our corporate family and leveraging the benefits of this acquisition as we continue to focus on future growth.”