Acquisition

RNS Number : 6517D

Tracsis PLC

07 December 2009

 



TRACSIS PLC

("Tracsis" or the "Company")

Acquisition of Safety Information Systems Limited

Tracsis plc (AIM: TRCS), a provider of operational planning software and consultancy services for the transport industries, is pleased to announce that on 4 December 2009 ("Completion") it entered into an agreement pursuant to which it acquired the entire issued share capital of Safety Information Systems Limited ("SIS"), a company which provides data analysis, process control and management reporting software. 

ACQUISITION HIGHLIGHTS

• Safety Information Systems Limited is the proprietor of a software suite called COMPASSTM that assists with the management and dissemination of performance related event data within operations and safety critical functions.

• SIS operates predominantly within the UK rail sector although also provides software and services to clients with the marine and energy generation sectors where its product offerings are highly relevant.  

• SIS generated revenue of £327,259 during the year ended 31 December 2008 resulting in operating profit of £188,933.

• The directors of Tracsis believe SIS has strong synergies with Tracsis and valuable growth potential which will contribute to broadening the Company's customer base and expanding its client offering.

• Initial consideration of £465,000 of which £415,000 shall be satisfied in cash and £50,000 by the issue of 97,087 ordinary shares ("Ordinary Shares") subject to an adjustment mechanism based on the net current assets of SIS at Completion.

• Subject to agreed financial targets on the performance of SIS in the year commencing 04 March 2010, deferred consideration of up to £50,000 will be paid which will be satisfied by way of cash and the issue of Ordinary Shares.

The Directors believe that the acquisition of SIS will further strengthen the Company's product offering to transport operators whilst at the same time broadening the reach of the enlarged group into other industries. The roles of performance management and the reporting of delay attribution and other safety critical information are extremely important within the transportation markets and are an integral part of timetable and resource planning functions where Tracsis already operates. The SIS product set should be highly complementary to the existing products and services of the Tracsis group of companies and the transaction has been deliberately structured to minimise dilution to existing shareholders. The Directors believe the acquisition will be earnings enhancing and will further the groups ambition as a leading provider of intelligent planning systems.

John McArthur, Chief Executive Officer, Tracsis Plc, commented:

“I am delighted to announce Safety Information Systems is now part of the Tracsis Group. The acquisition of SIS is the 3^rd transaction we have made in the past 15 months and has all the positive attributes we look for in a company i.e. – a profitable business model, good quality recurring revenue, a great product with high barriers to entry, supportive customers and solid management.  The COMPASS software is relatively new to the UK rail industry but we believe this to be the best-in-breed performance reporting tool.  From speaking with our customers I am confident there is significant scope to grow market share in the short term and we believe this acquisition furthers our growth strategy of becoming a leading provider of intelligent planning systems for the transport sector.”

7 December 2009

Enquiries

Tracsis plc	+ 44 (0) 845 125 9162
John McArthur, Chief Executive Officer
Haggie Financial LLP	[phone]
Nicholas Nelson / Kathy Boate
Zeus Capital Limited	[phone]
Alex Clarkson / Bobby Fletcher

DETAILS OF THE ACQUISITION

Consideration

The initial consideration payable comprises a sum of £465,000 of which £415,000 shall be satisfied in cash and £50,000 satisfied by the issue of 97,087 Ordinary Shares at a price of 51.5 pence per share ("Consideration Shares").  The cash amount payable is subject to the net current assets for SIS being at least £50,000 at completion and will be adjusted accordingly where this is not the case.

Application will be made for the admission of the 97,087 Ordinary Shares issued on completion of the acquisition to trading on AIM. The selling shareholder will not (save in certain specific circumstances) dispose of any of the Consideration Shares for a period of 12 months following completion and thereafter for a further 12 months any disposal must be through the Company's broker in an orderly manner.  

Deferred consideration of up to £50,000 is payable subject to the achievement of certain financial targets in the 12 month period to 04 March 2011. Where these targets are not met the deferred consideration will be adjusted downwards. The deferred consideration will be satisfied as to 90 per cent. in cash and as to 10 per cent. by the issue of Ordinary Shares at the average market value in the 5 business days prior to their issue. The cash consideration will be financed out of the Company's existing cash resources.

INFORMATION ON SIS LIMITED

SIS was established in 1991 to provide performance management capabilities to transport operators. SIS uses its COMPASS software which is focussed on effective management of performance and event data in operations and safety functions. The primary customer base is UK rail operators. The software proposition seeks to;

• Provide customised and flexible management information on performance and incidents for all managers to enable them to manage more effectively

• Support compliance (e.g. incident reporting requirements, performance data provision to Department for Transport)

• Ensure follow up actions are completed through progress tracking

• Reduce staff cost and lead time to produce management information, enabling close to real time analysis and reporting

The COMPASS software further addresses the following functions;

• Train operating companies ("TOCs") must store, evaluate and report on delay attribution data

• TOCs and other businesses must have robust procedures for managing safety incidents and ensure that information relating to these is propagated throughout their operation and actioned in a timely and appropriate manner

 

END

 

 

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