(Alliance News) - Tracsis PLC on Monday said it bought the US-based rail technology and services provider RailComm LLC for USD11.5 million, to expand its rail software footprint and the addressable markets for its products and services.
Tracsis is a Leeds-based provider of software, hardware, data analysis, and services for the rail, traffic data and wider transport industries.
The company said that the acquisition will be funded through its cash reserves.
It intends to make an additional payment of USD2.5 million to RailComm, depending on the business achieving certain financial targets in the first full year after the acquisition. The cash for the payment will be held in escrow through that period, Tracsis said.
In 2021, RailComm delivered revenue of USD6.0 million, including USD2.5 million of recurring software revenue, and generated a pretax loss of USD3.0 million.
Tracsis continued that RailComm has a "significant" order book. Therefore, the company expects it to achieve "good" levels of revenue and profit growth going forward.
The company said it purchased the Fairport, New York-based business to expand its rail software footprint and the addressable markets for its products and services.
"In addition to the significant growth opportunities that exist within RailComm's core rail markets, we now have direct access to a long-established sales network into a significant number of rail clients in the North America market," Tracsis stated.
Chief Executive Chris Barnes added: "This is an important strategic acquisition for Tracsis, providing 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."
Shares were up 3.3% at 930.00 pence each on Monday morning in London.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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Tracsis (TRCS)