Smart Parking expands into US market with Peak Parking acquisition and $45m equity raising

Smart Parking Limited has taken a significant step in its global expansion strategy with the acquisition of Peak Parking LP, a Texas-based boutique parking operator with a strong presence across six US states. This acquisition marks the Australian Securities Exchange-listed company’s first major foray into the United States, the world’s largest parking services market.

The acquisition, valued at up to $36 million, is set to be financed through a $45 million equity raising, which includes both an institutional placement and a pro-rata accelerated entitlement offer. Smart Parking’s decision to expand into the US aligns with its long-term strategy of leveraging its proprietary parking technology to drive revenue growth and operational efficiencies in new markets. The deal is expected to be immediately earnings per share (EPS) accretive, with significant opportunities for revenue and margin expansion through the integration of Smart Parking’s innovative technology platform.

What Are the Key Details of Smart Parking’s Peak Parking Acquisition?

Smart Parking has agreed to acquire 100% of Peak Parking’s issued capital, structured as an equity purchase agreement. The transaction consists of an initial payment of $32 million, comprising $26 million in cash and $6 million in Smart Parking scrip, with an additional earnout of up to $4 million based on Peak Parking achieving an EBITDA of at least $4.5 million in calendar year 2025. If this target is met, the total transaction value will reach $36 million.

The acquisition will be funded through a $45 million equity raising, fully underwritten by Canaccord Genuity. The company will also utilize its recently expanded $10 million revolving credit facility with HSBC as part of the funding structure. The valuation multiple for the deal stands at 8.0x Peak Parking’s projected CY25 EBITDA, with the possibility of a lower multiple should the acquired company exceed its EBITDA forecast.

Peak Parking, founded in 2016, has rapidly expanded its operations to 134 locations across the US. Its service offerings include parking garage management, valet parking, special event parking, and consulting services. The company has demonstrated impressive financial performance, recording a 45% compound annual growth rate (CAGR) from 2022 to 2024, reaching $9.1 million in revenue in 2024 and an EBITDA of $3.3 million.

Why Is Smart Parking Entering the US Market Now?

The US parking industry is one of the most dynamic and competitive markets in the world, presenting an opportunity for Smart Parking to integrate its advanced parking technology and establish a foothold in a high-growth sector. The acquisition of Peak Parking provides immediate geographic expansion, allowing Smart Parking to introduce its cloud-based parking solutions, automated payment systems, and data-driven management technology to a well-established US operator.

Smart Parking CEO Paul Gillespie emphasized that the acquisition aligns with the company’s broader strategy of leveraging technology to improve efficiency and profitability in the parking industry. He noted that Peak Parking has built a strong reputation and an attractive portfolio of sites in the US, making it an ideal partner for expansion. The acquisition is expected to create new opportunities for revenue growth and operational synergies, further enhancing Smart Parking’s position as a global leader in smart parking solutions.

How Will the $45 Million Equity Raising Support the Acquisition?

To fund the acquisition, Smart Parking has launched a fully underwritten $45 million equity raising, consisting of:

• An institutional placement to raise $32.2 million, open to new and existing institutional investors.
• A $12.8 million pro-rata accelerated non-renounceable entitlement offer, allowing eligible Australian and New Zealand retail and institutional shareholders to participate.

Smart Parking will issue approximately 51.1 million new shares at $0.88 per share, representing a 9.3% discount to its last closing price of $0.97. The entitlement offer provides shareholders with the opportunity to subscribe for one new share for every 24.35 existing shares held as of February 19, 2025.

The funds raised will primarily cover the cash component of the acquisition, alongside associated transaction costs. The offer structure ensures that existing shareholders can participate on a pro-rata basis, maintaining their proportional ownership while also attracting new institutional investment.

What Impact Will the Acquisition Have on Smart Parking’s Financial Performance?

The integration of Peak Parking is expected to be immediately EPS accretive, with analysts forecasting a greater than 25% increase in earnings per share for FY25. The transaction is structured to ensure minimal dilution to existing shareholders, while also strengthening Smart Parking’s position in a high-growth international market.

Beyond immediate financial benefits, the acquisition is expected to drive long-term revenue and margin expansion through the implementation of Smart Parking’s automated parking solutions. The company’s Smart Cloud technology, license plate recognition systems, and digital payment infrastructure will be integrated into Peak Parking’s operations, improving efficiency and enhancing profitability.

Additionally, Smart Parking’s expanded presence in the US parking sector is likely to boost investor confidence and create new growth opportunities, particularly as demand for technology-driven parking solutions continues to rise.

What Are the Next Steps for Smart Parking?

Completion of the acquisition remains subject to regulatory approvals and customary closing conditions. The company expects the transaction to be finalized by March 2025, following the conclusion of the equity raising process.

Smart Parking’s shares remain in a trading halt pending the completion of the placement and institutional entitlement offer. The retail entitlement offer is set to open on February 24, 2025, with new shares expected to be issued by March 14, 2025.

The acquisition of Peak Parking represents a transformational move for Smart Parking, positioning the company for significant expansion in the US market. By combining Peak Parking’s operational expertise with Smart Parking’s cutting-edge technology, the company is well-placed to capitalize on emerging trends in smart parking solutions and increase its global market share.