Vancouver's WebTech Wireless Inc. (TSX:WEW) has acquired a Toronto-based competitor for $38 million in a bought share deal.
WebTech, which manufactures wireless systems and global positioning systems (GPS) for auto fleets, will acquire Grey Island Systems International Inc. (TSX-V:GIS).
Webtech said the deal is part of its strategy to be an active consolidator in the fleet management systems industry.
Each Grey Island common share will be exchanged for $0.30 of a WebTech Wireless common share.
Webtech said that the exchange represents a premium of 50% on Grey Island's closing price on August 6.
Grey Island earns the majority of its revenue from sales to government.
WebTech's share price was down 10% to $1.32 at the market close on Friday, the day the deal was announced.
WebTech's share price this week ranged between $1.50 and $1.32; 52-week high: $3.07; 52-week low: $0.70.