Tracsis Regulatory News (TRCS)

11 March 2020

Tracsis plc

("Tracsis" or the "Group")

Completion of Acquisition

Tracsis, a leading provider of software and services for the rail, traffic data and wider transport industries, is pleased to announce that it has acquired the entire issued share capital of iBlocks Limited ('iBlocks').

Established in 2000, iBlocks is a UK based software company that specialises in the provision of smart ticketing solutions, automated delay repay and the development of mission critical back office systems that are used by the Rail Delivery Group, the wider community of train operating companies (TOCs) and the rail supply chain. This acquisition strategically aligns with our objective of strengthening our rail product portfolio in areas where we can offer a unique market proposition, gain access to strategically important partnerships and leverage the cross-selling opportunities that exist across our Rail Technology division.

The Directors believe that smart/account based ticketing and automated delay repay is a significant and natural growth area for the rail industry and that iBlocks are uniquely placed to help facilitate the move towards a paperless ticketing environment. The acquisition will enhance Tracsis Group's overall technology and software offering and should be significantly earnings enhancing.

In the year ended 28 February 2020, iBlocks generated revenue of c. £3.0m, Profit before Tax of c. £1.1m, and had net assets of c. £3.5m. The business is highly cash generative, debt free and benefits from an excellent reputation within its retained customer base and wider UK rail industry.

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 c. £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 plc, commented: 

"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. We welcome the iBlocks management team and all staff to the Tracsis Group, and look forward to helping them achieve their growth aspirations as part of a larger organisation."

Tim Brewer, Director of iBlocks, commented: 

"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."

An application has been made for the new Ordinary Shares to be admitted to trading on AIM and dealings are expected to commence on 16 March 2020. The shares issued are subject to a one year lock-in agreement whereby no disposals may be made within the first six months with any disposals thereafter up to twelve months subject to orderly market conditions.

Following the issue of the new shares, the total number of shares in issue will increase to 29,055,804. For the purposes of the Financial Conduct Authority's Disclosure and Transparency Rules ("DTRs"), the issued ordinary share capital of the Company following this allotment consists of 29,055,804 Ordinary Shares with voting rights attached (one vote per Share). There are no Shares held in treasury. This total voting rights figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interests in, or a change to their interest in, Tracsis under the DTRs.

Enquiries:

Tracsis plc Tel: 0845 125 9162

Chris Barnes, CEO

Max Cawthra, CFO

finnCap Ltd Tel: 020 7220 0500

Christopher Raggett/Scott Mathieson, Corporate Finance

Andrew Burdis, Corporate Broking

The information communicated in this announcement is inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

Notes to editors:

· Tracsis plc is a technology company and a leading provider of software and hardware products, data capture and data analytic services for the rail, traffic data and wider transport industries.

· Tracsis' products and services are widely used to increase efficiency, reduce cost and risk and improve operational and asset performance, safety management and decision making capabilities for clients and customers. 

· The Group is split into two principle operating areas built around detailed industry knowledge and expertise:

- Rail Technology & Services: Software and technology led business supported by consultancy. Develops remote condition monitoring hardware and safety, productivity improvement, risk management and data acquisition software for rail infrastructure providers and software that solves complex resource, asset optimisation and control problems for Train Operators.

- Traffic & Data Services: A largely services led business that focuses on data capture, data analytics, data insights and event traffic management within transport and pedestrian rich environments. The business provides technology and data that underpins large scale intelligent transport system and smart city planning and decision making.

· Tracsis has a blue-chip client base which includes all major UK transport owning Groups. The business also works extensively with Network Rail, the Department of Transport, TfL, multiple local authorities, major outdoor music and sporting event organisers, and a wide variety of large engineering and infrastructure companies.

· The business drives growth both organically and through acquisition and has made fourteen acquisitions since 2008.

· For more information on Tracsis please visit http://www.tracsis.com