Lytx Inc. and Permira, a global private equity firm, announced that a company backed by the Permira funds and co-investors have entered into a definitive agreement to acquire a majority stake in Lytx. The transaction values Lytx, a provider of machine vision and artificial intelligence-powered video telematics solutions for commercial, public sector and field services fleets, in excess of $2.5 billion.
Fleets of every size and sector are looking to machine vision and artificial intelligence to turn vast amounts of data into business insights that can help them gain competitive advantage in the $30 trillion global transportation economy.
"Permira is a leading technology investor globally and has a proven track record of helping companies build and grow their businesses over the long term," said Brandon Nixon, CEO of Lytx, in a statement. "With their expertise and the capital from this transaction, Lytx is poised to accelerate product innovation, make strategic acquisitions, expand globally and further lead the digital transformation of fleets worldwide."
The market for video telematics remains virtually untapped. Only an estimated one million commercial vehicles are currently leveraging data derived from video telematics technologies—less than 1 percent of the 125.6 million commercial vehicles globally, according to industry research firm Frost & Sullivan.
"While Lytx has experienced rapid, double-digit growth in recent years, we've barely begun to scratch the surface of the addressable global market," added Nixon.
"We have long admired Lytx and its management team as the clear market leader in this incredibly promising, high-growth sector," said Brian Ruder, partner and co-head of technology at Permira, in a statement. "In a field of more than 100 competitors, Lytx stands head and shoulders above the rest. We're especially impressed by Lytx's ability to aggressively set the pace for innovation, while maintaining positive EBITDA. We see numerous opportunities to leverage our cross-sector expertise in technology and industrials, as well as our global footprint, to accelerate Lytx's already strong revenue growth domestically and internationally. We look forward to backing the company in its next growth phase."
Among many other applications, Lytx's machine vision and artificial intelligence technologies are used to combat distracted driving, which claims more than 3,100 lives a year in the U.S. and injures hundreds of thousands more. By detecting signs of distracted driving, such as cell phone use and smoking, with a high degree of accuracy, its algorithms give commercial vehicles a tool to protect drivers.
"Today marks the beginning of an exciting new part of Lytx's journey to help the leaders of the global transportation economy use video data and analytics to transform their industries," said Nixon, who will remain Lytx's CEO and chairman of the board. "With the Permira funds' investment, the largest ever in video telematics, we will embark on our next phase of growth and innovation. Our clients remain at the center of our efforts as we continue to seek new ways to help them solve their toughest operational problems and keep their workers safe."
Lytx's current executive leadership team will remain in their roles following the close of the transaction, which is expected in the first quarter of 2020. Rothschild & Co. served as exclusive financial advisor to Lytx, and Kirkland & Ellis provided legal counsel. Union Square Advisors LLC served as financial advisor to Permira, and Fried, Frank, Harris, Shriver & Jacobson provided legal counsel.