Michelin has agreed to acquire telematics provider NexTraq from Fleetcor in an all-cash deal the tire maker announced Wednesday.
Ralph Dimenna, chief operating officer for Michelin Americas Truck Tires, says telematics and fleet management services – a rapidly growing category globally – are an important part of Michelin Group’s overall business plans.
“NexTraq represents a strategic acquisition that accelerates our growth in telematics with synergies that increase our scale, expand our geographic footprint and strengthen overall competitiveness in fleet management technology and services in the United States,” he says.
“We can figure out easily how we can help fleets with their tires, but when it comes to other aspects of their business, we’re not so good at figuring out,” adds Serge Lafon, head of Group Michelin Truck, noting the NexTraq acquisition helps Michelin develop a deeper level of customer intimacy. “It’s designed to make the customer’s mobility easier, greener and better.”
NexTraq provides solutions for driver safety, fuel management and enhancing fleet productivity and has become a leading provider of GPS fleet management solutions for fleets of small commercial vehicles (classes 3‒5) ranging from two to 50 vehicles.
Fleetcor Chairman and CEO Ron Clarke says the decision to sell the telematics division came down to its ill-fit with Fleetcor’s core business of fuel cards and workforce payment products.
“While we were able to grow NexTraq’s operating income nearly 400 percent since we acquired the business and to generate a strong return for our shareholders, our decision to divest NexTraq centered on the conclusion that there is insufficient synergy with our core payments business to stay invested in the space,” he says.
“NexTraq has technology that, among other capabilities, monitors reckless driving and stops texting while driving,”Dimenna adds. “This capability is an excellent cultural fit with Michelin’s purpose and long-standing commitment to road safety.”
NexTraq has 117 employees, approximately 7,000 fleet customers and 116,000 individual subscribers. The unit will operate independently within Michelin North America.