Completion of Acquisition

RNS Number : 6547H

Tracsis PLC

02 December 2015

 

Tracsis plc

("Tracsis" or the "Group")

Completion of Acquisition

Tracsis plc, a leading provider of software and technology led products and services for the traffic & transportation industry, is pleased to announce that it has acquired the entire issued share capital of Ontrac Limited and Ontrac Technology Limited (together being "Ontrac").

Based in Gateshead and London, Ontrac is an award winning software development and IT solutions company that work with a range of clients in the transport, construction, and local government sectors.   Ontrac works extensively within UK rail where their products have helped digitise process intensive workflows and aided with collaborative working through access to shared information.  The Directors believe that Ontrac is highly complementary to Tracsis' existing software development and consulting division, and offers strong cross sell and upsell opportunities across the Group.

In the year ended 31 January 2015, Ontrac generated revenue of £7.1m, and adjusted* Profit Before Tax of £2.4m.   The business is debt free, and has a history of strong organic growth coupled with excellent cash generation.  Ontrac employs around 30 permanent staff, all of whom will remain with the business post transaction.

The acquisition consideration comprises an initial cash payment of £6.0m which will be funded out of Tracsis cash reserves and the issue of 197,624 new ordinary shares in Tracsis (issued at a price of 463p which values the shares at £915K), along with a payment of around £4.6m that represents the value of the company's tangible net assets at completion.  

Additional Deferred Consideration of up to £5.0m along with Performance Consideration of up to £3.0m is payable subject to Ontrac achieving certain financial targets in the two years post acquisition.  Therefore, Tracsis will pay an initial amount of £11.5m (£6.9m goodwill and c. £4.6m for tangible assets) and, on the basis that all stretch financial targets are achieved, a maximum total consideration of up to £19.5m.

As a result of this acquisition, it is expected that the Group will exceed current market forecasts for the year ending 31 July 2016.

John McArthur, Chief Executive Officer of Tracsis plc, commented: 

"We are delighted to have completed this acquisition which continues our trend of acquiring well run, profitable, niche businesses that are complementary to the broader goals of Tracsis and our customer base.  Ontrac is a well-established company with an excellent track record of technology delivery within the rail sector.  We believe there is a great fit with Tracsis in terms of people, culture, products and services and we welcome the Ontrac team to the Group."

Martyn Cuthbert, Managing Director of Ontrac, commented: 

"We are pleased to come together with Tracsis who are a natural fit for Ontrac. The combined Group will have a significant development capability that will benefit our customer base and we look forward to working together on joint opportunities for the enlarged Group."

An application has been made for the new Ordinary Shares to be admitted to trading on AIM and dealings are expected to commence on 8th December.  The shares issued are subject to a 2 year lock-in agreement whereby no disposals may be made within the first 12 months with any disposals thereafter up to 24 months subject to orderly market conditions. 

Following the issue of the new shares, the total number of shares in issue will increase to 26,928,892.  For the purposes of the Financial Conduct Authority's Disclosure and Transparency Rules ("DTRs"), the issued ordinary share capital of the Company following this allotment consists of 26,928,892 Ordinary Shares with voting rights attached (one vote per Share). There are no Shares held in treasury. This total voting rights figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interests in, or a change to their interest in, Tracsis under the DTRs.

* Statutory Profit Before Tax has been adjusted for dividends and other Director emoluments.

For more information please contact:

John McArthur/Max Cawthra, Tracsis plc	Tel: [phone]
Dominic Emery/Matt Lewis, Investec Bank plc	Tel: [phone]
Rebecca Sanders Hewett, Redleaf PR	Tel: [phone] [e-mail]

Notes to editors: 

§ The Group specialises in solving a variety of data capture, reporting and resource optimisation problems along with the provision of a range of associated professional services.

§ Tracsis' products and services are used to increase efficiency, reduce cost and improve the operational performance and decision making capabilities for clients and customers. 

§ The Company offers the following services:

-  Software and technology led consulting: Industry strength resource optimisation and rail
 management software that covers a variety of asset classes working alongside consulting and
 related professional services across the operational and strategic planning horizon.

-  Remote Condition Monitoring: Technology and reporting for critical infrastructure assets in real
 time, to identify problems and aid with preventative maintenance.

-  Traffic & Data Services: Collation and analytical services within traffic and pedestrian rich
 environments, along with event planning, traffic management and associated services.

§ Tracsis has a blue chip client base which includes the majority of UK transport operators such as Arriva, First, Stagecoach, Go-Ahead, National Express and Virgin.  The business also works extensively with Network Rail, the Department of Transport, multiple local authorities, and a variety of large engineering/infrastructure companies.

§ The business drives growth both organically and through acquisition and has made eight acquisitions since 2008 and one strategic investment.

§ Tracsis listed on AIM in 2007 under ticker TRCS.

§ For more information visit http://www.tracsis.com

 

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