Transport tech group goes for global growth
Tracsis, a provider of software, hardware and data analytics services for the transport industry has acquired New York-based rail technology business RailComm for £10.9m.
Chris Barnes, CEO, Tracsis
The deal which is described by Tracsis CEO, Chris Barnes “an important strategic acquisition” for the Leeds headquartered firm, will support its international growth.
RailComm was established in 1999 and provides “mission critical” automation and control solutions to the rail sector which reduce costs, increase safety and improve operational efficiency.
Currently with two core products, RailComm’s client base across North America offers Tracsis direct access to a long-established sales network in the region. The business delivered £4.6m of revenue in the year to 31 December 2021 and currently has a significant order book which will Tracsis notes will support “good levels of revenue and profit growth going forward”.
The deal is split in two with an initial £8.8m payable, and an additional payment of £2.1m subject to the business achieving certain financial targets in the first full year following the purchase, all being funded by Tracsis cash reserves.
Barnes explained that the deal provides “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, added: “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.”
The acquisition follows Tracsis forecasting a revenue rise in its trading update for the six months ended 31 January 2022, and is the group’s second acquisition this financial year following the purchase of The Icon Group in November.
The addition of a RailComm, rail tech business, to the group follows the firm’s return to growth with increased revenues for the year ended 31 July 2021 which was identified as being fuelled by growth in its higher margin rail technology & services division.
