Trackunit acquires ZTR to create single telematics business
15 September 2021
Telematics specialist Trackunit is to acquire the Industrial IoT division of competitor ZTR to create a single business with 1 million items of connected equipment on construction sites worldwide. The price has not been disclosed.
The two said the combination would allow them to accelerate the digital transformation of construction.
The business will be led by Soeren Brogaard, CEO of Trackunit, with ZTR’s President and CEO Sam Hassan taking an executive role as head of strategy with a focus on OEM relationships.
ZTR’s railway division is not included in the transaction and will continue to operate as a stand-alone business under its current name.
The deal - which is expected to close at the end of november - is a significant change to the telematics landscape in construction and rental with the two largest players becoming one.
It will also double Trackunit’s revenues and increase its employee numbers from 220 to 350.
A tipping point in digitalisation
“We see the industry at a pivotal tipping point when it comes to digitalization of their business and equipment – and customers are looking for a trusted partner”, said Soeren Brogaard.
“By combining our businesses, we’re elevating our technology and increasing the value customers will be able to extract from their data”.
ZTR President & CEO Sam Hassan, said, “By combining ZTR IIoT and Trackunit resources and offerings, we’re better equipped to serve the needs of the customers now and in the future.
“By coming together with Trackunit, we will be able to operate on a global scale to provide an expanded offering to our customers with greater efficiency and depth”.
Brogaard told IRN that its customers were happy with the deal because it would bring greater harmonisation to the data surrounding telematics.
Many large equipment owners and rental companies operate mixed-brand fleets with different OEM and third-party telematics systems.
“The combination of Trackunit and ZTR will allow us to drive standardisation in a completely different way. The customers are looking at this in a bigger light...we can provide leadership towards data harmonisation”, he said.
The two are direct competitors but also complementary in some areas, with ZTR historically strong in North America and Trackunit more established in Europe. ZTR also brings a particular strength in OEM supplier deals. Both companies have recently invested in Asian operations.
Bluetooth technology for smaller assets
Brogaard added that the increased scale of the business will also help it increase the delivery of bluetooth technology for smaller and non-powered items of equipment and attachments; “OEMs are super-eager to find a solution for smaller equipment.”
When asked about the risk of reduced competition as a result of the deal, Brogaard said he was not concerned; “I don’t think it will change the appetite for investment in innovation, or the pressure that the market will put on us to innovate.”
He said Trackunit would not rush when it came to creating a single platform for its technology, or in rationalising the hardware it uses; “We have a lot of legacy systems, and our customers rely on these systems. They will not be penalised by a too-rushed integration.”
The deal follows a change of ownership at Trackunit in March this year, when software investor Hg acquired a controlling interest. Hg will now have a majority share of the combined business. Brogaard said the investor’s involvement was a strong driver for the deal; “We are very pleased with Hg’s support.”
Brogaard said Trackunit was unlikely to branch out into other business sectors given the scale of opportunity in construction, with only 20% of all possible items currently connected.
Promise on collaboration
Brogaard added; “Our promise to the industry is based on collaboration. With a purpose as determined and noble as eliminating downtime, we know that working with our customers to apply new digital tools, is absolutely necessary.
“We make ourselves useful and strive to solve real problems, building everything for scale, while showing compassion for our customers, partners, competitors, and the industry at large”.
“We’re focused on delivering our existing customer commitments and creating a smooth integration. This is all about bringing people, competence, and great technology together to create a bigger impact”.
Sam Hassan added; “ZTR and Trackunit together represent an incredible next step that will enable us to become a truly global player to better serve our customers. I’m excited to roll up my sleeves and take an active part in the executive team.
“I look forward to venturing out on this shared mission - one in which I have no doubt Soeren Brogaard will capably lead”.
The Trackunit brand will be retained going forward, although Brogaard said there may be adjustments in the future; “we will take some time on the branding strategy.”