Transport software firm completes second acquisition in a row

Tracsis, the Leeds-based transport software provider, has acquired Cash & Traffic Management Limited (CTM) for £1.7m.

Based in Coventry and established in 1998, CTM is a provider of event traffic planning, admission control, and a range of other event-related services to some of the UK’s largest and most prestigious event clients. The business employs 20 permanent staff, all of whom will remain with the business post transaction, and has a track record of organic growth, client retention and profitability.  In the year ended 28 February 2018, CTM generated revenue of £5.5m, pre-tax profits of £350,000, and had net assets of £800,000. 

Today’s announcement comes just a day after Tracsis announced it had acquired Compass, headquartered in Dublin, for €3.15m.

Directors at listed Tracsis said they believed that CTM was highly complementary to the Tracsis Traffic & Data Services Division with good cross-sell potential along with clear synergy benefits that should lead to margin improvement. 

The acquisition consideration comprises an initial cash payment of £1.3m which will be funded out of Tracsis cash reserves and the issue of 26,334 new ordinary shares in Tracsis (issued at a price of 589p) to a value of £150,000, along with an additional payment of circa £450,000 to reflect the net current asset position of the business.   Additional contingent consideration of up to £750,000 is payable subject to CTM achieving certain stretch financial targets in the two years post acquisition. 

John McArthur, Chief Executive of Tracsis, said: “We are delighted to come together with CTM which is a well-established business working in a related area to our SEP operation that has been very successful for Tracsis. CTM has an excellent client list, great customer retention and there are strong synergies with our existing Traffic & Data Services Division.  We welcome the CTM team to the Tracsis Group and look forward to growing the combined business in future.”

Steve Russell-Yarde, Managing Director of CTM, added: “I am extremely pleased that CTM has joined the Tracsis Group – The Company is now in a perfect place to build from the current position, develop its service provision, and utilise the wider group experience to provide innovative solutions to clients going forward.”

Compass, headquartered in Dublin and established in 1997, is a systems development and data analytics company that specialises in combining geographical information systems (GIS), location technologies, data analytics and field computing.  The business works across a variety of sectors but derives most of its revenue from transportation, asset management, planning, and environmental customers.

The acquisition of Compass is the first overseas acquisition made by Tracsis and the directors said the business was highly complementary to its Traffic & Data Services division whilst also bringing potential benefit and cross-sell potential to Tracsis’ existing transport clients.

In the year ended 30 September 2018, Compass generated revenue of €4.8m, pre-tax profit €600,000, and had net assets of €1.8m.  The business is debt free, and has a long history of stable organic growth. Compass employs around 50 permanent staff, all of whom will remain with the business post transaction.

The acquisition consideration comprises an initial cash payment of €3.15m which will be funded out of Tracsis cash reserves and the issue of 53,204 new ordinary shares in Tracsis (issued at a price of 587p) to a value of €350,000.  An additional payment of circa €500,000 will be made on a euro for euro basis to reflect the net current asset position of the business (above a working capital hurdle) at completion and will be finalised in due course.

Additional contingent consideration of up to €2m is payable subject to Compass achieving certain stretched financial targets in the three years post acquisition. 

 John McArthur, Chief Executive Officer of Tracsis, said:  “We have known the Compass team for a number of years now and are delighted to have completed this transaction which is a natural fit for our Traffic & Data Services division.  Coming together with Compass will strengthen the product and service offerings to our client base in the UK and also benefit those existing clients retained by Compass in Ireland.  This is a further significant milestone in our strategy of improving our data service offering.  We welcome the whole Compass team to Tracsis, and look forward to future successes together.”

Gearoid O’Riain, Managing Director of Compass, added:  “We are thrilled to have completed this transaction and to be joining forces with Tracsis.  Compass has an established position with our domestic Irish market and our highly respected clients, and has aspirations to further grow our presence in the UK market – which provides a far larger market opportunity.  Working as part of the Tracsis Group allows us to make this jump and we look forward to the significant growth opportunities that lie ahead.”

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