Transport software firm acquired by AIM-listed developer
An AIM-listed developer of advanced security and surveillance systems is to acquire RTS Solutions of Leeds for £1.5m.
RTS is a specialist transportation software engineering company whose main customers are currently Network Rail and its Tier 1 contractors. The firm’s unaudited accounts for the year ended 31 March 2017 show that it generated revenues of £778,000 and reported pre-tax profits of £262,000. More than half of those revenues related to recurring software licences, maintenance and support contracts.
Revenues recorded in the unaudited management accounts for the year ended 31 March 2018 totalled £800,000.
The acquisition comprises an initial cash payment of £1m and deferred consideration of £500,000, which is conditional upon RTS meeting certain financial and other targets during the 12 months ending 31 March 2019.
A payment of £600,000 will also be made on a pound for pound basis for surplus cash in RTS’s balance sheet.
The cacquisition is being satisfied in cash from Petards existing cash reserves and a new £1.25m five year bank term loan.
RTS will operate as an independent company within the Petards Group from its offices at Holbeck Rail Depot in Leeds and all staff will be retained within the business as part of the acquisition.
Petards said that the directors believed that the acquisition would strengthen the group’s software solutions offering and that it will provide the group with an entry into the UK rail infrastructure market to complement its existing eyeTrain on-board train systems.
Raschid Abdullah, Petards chairman, said: “We are delighted to welcome RTS and its staff to the Petards Group and look forward to working with them to further develop and grow its business. This acquisition marks a further step in the broadening of the Group’s portfolio of products, providing the opportunity to expand its earnings and enhance shareholder value.”
