Technology firm is Ontrac for growth after £19.5m acquisition
TRANSPORT technology business Tracsis has bought IT business Ontrac in a deal worth up to £19.5m.
Ontrac – which is made up of Ontrac Ltd and Ontrac Technology Ltd – is a software development and IT solutions company that works extensively in the UK rail sector.
Tracsis already works with the majority of UK transport operators, including Arriva, Stagecoach and Virgin, as well as Network Rail and the Department for Transport. It believes Ontrac is “highly complementary” to its own software development and consulting division, which will create increased sales opportunities across the group.
John McArthur, chief executive of Tracsis, said: “We are delighted to have completed this acquisition which continues our trend of acquiring well run, profitable, niche businesses that are complementary to the broader goals of Tracsis and our customer base.”
Tracsis was spun out of the University of Leeds 10 years ago and is still headquartered in the city, with eight other UK offices, and employs 400 people. Its most recent financial year, to July, showed a 14% increase in revenues to £25.4m with adjusted pre-tax profits increasing 16% to £5.8m.
In the last six months it has also bought traffic management firm SEP in a £2.6m deal and invested up to £1m for a 29.4% stake in mobile phone data analytics firm Citi Logik.
The AIM-listed business will initially pay £11.5m for Ontrac – made up of £6.0m cash, £0.9m in shares and a further payment of £4.6m for net assets – with additional payments totalling £8m being deferred and partly dependent on performance over the next two years.
Ontrac employs 30 people in Gateshead and London and in the year to January, it generated revenues of £7.1m and adjusted pre-tax profit of £2.4m. Its products have helped digitise process intensive workflows and aided with collaborative working through access to shared information.
Martyn Cuthbert, managing director of Ontrac, added: “The combined group will have a significant development capability that will benefit our customer base and we look forward to working together on joint opportunities for the enlarged group.”
