Listed software firm completes multi-million pound acquisition

Tracsis, a Leeds-based software provider for the transport industries, has acquired another software business – iBlocks.

Established in 2000, iBlocks is a UK-based company that specialises in the provision of smart ticketing solutions, automated delay repay and the development of mission critical back office systems.

These are used by the Rail Delivery Group, the wider community of train operating companies (TOCs) and the rail supply chain.

In the year ended 28 February 2020, iBlocks generated revenue of £3m, pre-tax profits of about £1.1m, and had net assets of about £3.5m.

The acquisition consideration comprises an initial cash payment of £12.5m which will be funded out of Tracsis cash reserves and the issue of 192,926 new ordinary shares in Tracsis (issued at a price of £7.775) with a value of £1.5m. 

An additional payment of £3.2m will be made on a pound for pound basis to reflect the net current asset position of the business at completion and will be finalised in due course.

Additional contingent consideration of up to £8.5m is payable subject to iBlocks achieving certain stretched profit financial targets in the three years post acquisition.

Chris Barnes, chief executive officer of Tracsis, said: “We are delighted to have come together with iBlocks, a business we have known for a number of years now.

“We believe the unique technology offering that iBlocks has developed along with long established client relationships will open up an exciting new area of opportunity for Tracsis.

“The smart/account based ticketing market in particular is an area of the rail industry that will see significant future industry change and growth.”

Tim Brewer, director of iBlocks, said: “This transaction marks the start of an exciting new chapter for the iBlocks business and our team.

“Over the past fifteen years, iBlocks has established a reputation in the rail industry as a provider of high-quality software products, which deliver unique, innovative and robust solutions for our customers especially within the smart ticketing and delay repay sectors of the industry.

“Being part of a larger Group will enable us to unlock opportunities that will benefit the UK rail industry and accelerate our growth.”