Canadian billionaire lobs massive bid for ASX-listed software group

Since May 30, Volaris has built up an almost 18 per cent stake in the company for $NZ23.7 million. If the offer is successful, Volaris has agreed to pay those earlier sellers any difference with the final sales price.

EROAD’s shares had been heavily sold off, languishing well below its listing price of $NZ3.90, when the company received a speeding ticket two weeks ago from the New Zealand market operator querying why its shares jumped 52.6 per cent from NZ57¢ to NZ97¢ between May 25 and June 8.

In response the company said it had complied with its continuous disclosure obligations.

EROAD declined to comment on the offer and has commenced a process to consider the bid alongside advisers Goldman Sachs and Chapman Tripp.

“The board will act in what it considers to be the best interests of the company and its shareholders, including assessing the merits of the [offer] from Volaris relative to the work under way on reviewing partnership options to contribute some combination of market access, expertise and capital to drive further growth in North American market and other alternatives,” the company said.

“There is no certainty that the [offer] or the strategic review will result in any transaction.”

The company had previously hired Goldman Sachs to help conduct a strategic review to identify partners that would help the business accelerate its North American growth, as part of a wider plan to return the business to profitability.

In its most recent annual report, EROAD chairman Graham Stuart said the company was beginning to turn things around after “going off the rails” in the last financial year. EROAD says it expects the business will be cashflow neutral by 2025 and cashflow positive in 2026.

Volaris owns more than two dozen technology businesses across Australia and New Zealand, including asset management and logistics company Smartrak. It tends to hold on to the companies it acquires, providing the smaller businesses access to resources to help them grow.

Constellation, its parent, is also highly acquisitive, buying up hundreds of smaller businesses to target specific industry verticals from utilities to real estate. Founded by Mark Leonard, a former venture capital investor, in 1995 and listed in 2006, Constellation has a market capitalisation of $C57 billion ($64 billion).