North American Rail Acquisition

RNS Number : 5835E

Tracsis PLC

14 March 2022

 

14 March 2022 

Tracsis plc

("Tracsis" or "the Group")

North American Rail Acquisition

Tracsis, a leading provider of software, hardware, data analytics/GIS and services for the rail, traffic data and wider transport industries, is pleased to announce that it has acquired RailComm LLC ("RailComm") a North American based rail technology software and services provider.

Headquartered in Fairport, New York and established in 1999, RailComm provides mission critical automation and control solutions that reduce costs, increase safety, and improve operational efficiency for rail passenger/freight operators and rail served ports/industrials. Its two core products are rail yard automation and computer aided dispatching and it has a wide and diversified client base across the North American market. The business has good levels of annual recurring software revenues in addition to large project delivery/systems integration work. The business employs around 30 full-time staff, all of whom will remain with the business post transaction.

The acquisition is in line with Tracsis' strategy of extending its rail software footprint and expanding the addressable markets for its products and services. In addition to the significant growth opportunities that exist within RailComm's core rail markets, we now have direct access to a long-established sales network into a significant number of rail clients in the North America market. This will enable Tracsis to progressively market its existing portfolio of rail products and services, with Remote Condition Monitoring the initial area of focus.

For the financial year ended 31 December 2021, RailComm delivered revenue of $6.0m (£4.6m) including c$2.5m (£1.9m) of recurring software revenue and generated an unaudited loss before tax of $0.3m (£0.2m). It has a significant order book, and as a result we anticipate good levels of revenue and profit growth going forward.  The business is being acquired on a debt free basis.

The acquisition consideration comprises an initial cash payment of $11.5m (£8.8m) . Additional contingent consideration of up to $2.7m (£2.1m) is payable subject to RailComm achieving certain financial targets in the first full year post acquisition. This cash will be held in escrow through that period. The consideration will be funded out of Tracsis cash reserves.

Chris Barnes, Chief Executive Officer of Tracsis plc, commented:

"This is an important strategic acquisition for Tracsis plc, providing a platform onto which we can start to internationally expand the Tracsis Group and its rail product portfolio via direct access to the significant and growing North American rail technology market. We are delighted to welcome all of the RailComm team into the Tracsis Group and look forward to a successful future working together".

Joe Forgione, President of RailComm LLC, commented:

"The RailComm team is very excited about joining the Tracsis Group. Both businesses have a long history of driving innovation via R&D built around long-term client relationships and we look forward to expanding our ability to offer a much broader range of rail technology solutions across our extensive client base in North America."

 

Notes:

1.  The US$ values quoted in this announcement are also shown in £s by converting the US$ values at an exchange rate of $/£ of 1.31.

2.  The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.

Enquiries:
Tracsis plc	Tel: [phone]
Chris Barnes, CEO
Andy Kelly, CFO
finnCap Ltd	Tel: [phone]
Christopher Raggett/Charlie Beeson, Corporate Finance
Andrew Burdis, Corporate Broking
Alma PR	Tel: [phone]
Rebecca Sanders-Hewett/David Ison/Joe Pederzolli	[e-mail]

 

Notes to editors: 

· Tracsis plc is a technology company and a leading provider of software and hardware products, data capture and data analytics/GIS services for the rail, traffic data and wider transport industries.

· Tracsis' products and services are widely used to increase efficiency, reduce cost and risk, improve operational and asset performance, improve safety management and decision-making capabilities, and improve the overall customer experience for clients and customers. 

· The Group is split into two principle operating areas built around detailed industry knowledge and expertise:

-  Rail Technology & Services:  Software and technology/product led business. It develops and supplies software that solves complex resource, asset optimisation and control problems for Train Operators and Smart Ticketing, Delay Repay and other retail software to improve the customer experience for rail users. It also develops remote condition monitoring hardware, data acquisition software, safety and risk management software solutions for rail infrastructure providers.

-  Data, Analytics, Consultancy & Events: A largely services led business that focuses on data capture, data analytics, GIS, earth observation, data insights, consultancy, and event traffic management within a range of transport and pedestrian rich environments.  The business provides technology/bespoke products and data that underpins large scale intelligent transport system and smart city planning and positive environmental decision making.

· Tracsis has a blue-chip client base which includes all major UK transport owning Groups, Network Rail, Passenger and Freight Train Operating Companies, the Department for Transport, TfL, multiple local authorities, major outdoor music and sporting event organisers, and a wide variety of large engineering and infrastructure companies. In North America our clients include Class 1 rail freight companies, transit operators, shortline railroads and several large rail served ports and industrials. 

· The business drives growth both organically and through acquisition and has made seventeen acquisitions since 2008.

For more information on Tracsis please visit http://www.tracsis.com

 

END

 

 

ACQBKBBBBBKDPND