Cartrack, whose shares more than doubled in 2020, plans to delist from the JSE and file for an initial public offering on the tech-heavy Nasdaq stock exchange in the US, the company announced on Thursday.

The South African-founded telematics and vehicle recovery specialist, which owns its own software assets and which now operates in 23 countries, believes the proposed scheme, if approved, will unlock value for shareholders, particularly those who elect to stay invested in a new holding company vehicle.

Singapore-registered Karooooo (formerly Karoo), the controlling shareholder in Cartrack, will buy out minority shareholders in the business — though shareholders have the option of effectively swapping their Cartrack shares for shares in Karooooo). Karooooo is currently wholly owned by Cartrack founder and CEO Zak Calisto.

In effect, Cartrack and Karooooo have reached an agreement in terms of which the latter has made an offer, valued at just over R4-billion in total, to acquire the shares it doesn’t already hold in Cartrack.

Cartrack shareholders will be given the opportunity to remain invested, through Karooooo, in the “long-term value, benefits and strong growth opportunities of the Cartrack Group, in the event that the proposed transaction becomes operative”.

Nasdaq

The plan then is to list Karooooo on the Nasdaq, with an inward listing on the JSE. Cartrack shareholders will be entitled to utilise up to a maximum of their “scheme consideration” to subscribe for Karooooo shares, “resulting in the value of their effective interest in Cartrack remaining unchanged after the full reinvestment and prior to any primary capital raise that may be undertaken by Karooooo”.

“Karooooo’s intention is to convert Cartrack to a private company, subject to the provisions of the Companies Act and subsequent to the implementation of the delisting,” Cartrack said.

The scheme, the company said, will “create a more efficient global corporate and operating structure, reflective of the Cartrack Group’s international operations and global growth strategy”.

It will also, Cartrack said:

Accelerate its global growth strategy;
Enable it to attract and retain international talent to Singapore;
Provide it with access to global technology infrastructure and research and development expertise;
Assist in attracting a substantially larger and more diverse international pool of investors who understand the long-term value dynamics of software as a service;
Provide it with access to global capital markets; and
Potentially yield a rerated company valuation similar to global software peers.

If the proposed scheme is approved, Karooooo will appoint additional directors – other than Calisto – to its board. As of the operative date of the scheme, shareholders in Karooooo will be Calisto and all Cartrack shareholders who elected to participate in the reinvestment offer.