MENU

The Cabcharge Australia Limited (ASX: CAB) share price falls on new acquisition

Shares in Cabcharge Australia Limited (ASX: CAB) fell 2.4% to $2.44 on Wednesday, after the company announced the acquisition of Mobile Technologies International (MTI), a provider of dispatch and booking software to the taxi industry.

Despite spending just $7 million on MTI, Cabcharge presented the acquisition as a significant strategic move towards the renovation of its dispatch and payment tools for taxi operators, aimed at enhancing service experience and enabling the company to compete with other personal transport companies.

This sounds like an obvious reference to rideshare companies like Uber, which recently disrupted the industry with their more technologically advanced offer.

However, the acquisition might also be a way for Cabcharge to establish a presence overseas, as MTI works with taxi companies in North America and in the UK, and owns and operates Mantax Taxis, the largest cabs network in Manchester.

The transaction should be completed by the end of the year, subject to the approval from the Australian Competition and Consumer Commission.

In fact, MTI provides its technology to most taxi networks in Australia, including Cabcharge’s competitors. In order to ensure that MTI doesn’t discriminate its other customers, Cabcharge intends to keep it as a separate entity, maintaining its existing management structure.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.