Completion of Acquisition
("Tracsis" or the "Group")
Completion of Acquisition
Tracsis plc, a leading provider of software and technology led products and services for the traffic & transportation industry, is pleased to announce that it has acquired the entire issued share capital of Ontrac Limited and Ontrac Technology Limited (together being "Ontrac").
Based in Gateshead and London, Ontrac is an award winning software development and IT solutions company that work with a range of clients in the transport, construction, and local government sectors. Ontrac works extensively within UK rail where their products have helped digitise process intensive workflows and aided with collaborative working through access to shared information. The Directors believe that Ontrac is highly complementary to Tracsis' existing software development and consulting division, and offers strong cross sell and upsell opportunities across the Group.
In the year ended 31 January 2015, Ontrac generated revenue of £7.1m, and adjusted* Profit Before Tax of £2.4m. The business is debt free, and has a history of strong organic growth coupled with excellent cash generation. Ontrac employs around 30 permanent staff, all of whom will remain with the business post transaction.
The acquisition consideration comprises an initial cash payment of £6.0m which will be funded out of Tracsis cash reserves and the issue of 197,624 new ordinary shares in Tracsis (issued at a price of 463p which values the shares at £915K), along with a payment of around £4.6m that represents the value of the company's tangible net assets at completion.
Additional Deferred Consideration of up to £5.0m along with Performance Consideration of up to £3.0m is payable subject to Ontrac achieving certain financial targets in the two years post acquisition. Therefore, Tracsis will pay an initial amount of £11.5m (£6.9m goodwill and c. £4.6m for tangible assets) and, on the basis that all stretch financial targets are achieved, a maximum total consideration of up to £19.5m.
As a result of this acquisition, it is expected that the Group will exceed current market forecasts for the year ending 31 July 2016.
John McArthur, Chief Executive Officer of Tracsis plc, commented:
"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. Ontrac is a well-established company with an excellent track record of technology delivery within the rail sector. We believe there is a great fit with Tracsis in terms of people, culture, products and services and we welcome the Ontrac team to the Group."
Martyn Cuthbert, Managing Director of Ontrac, commented:
"We are pleased to come together with Tracsis who are a natural fit for Ontrac. 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."
An application has been made for the new Ordinary Shares to be admitted to trading on AIM and dealings are expected to commence on 8th December. The shares issued are subject to a 2 year lock-in agreement whereby no disposals may be made within the first 12 months with any disposals thereafter up to 24 months subject to orderly market conditions.
Following the issue of the new shares, the total number of shares in issue will increase to 26,928,892. 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 26,928,892 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.
- Statutory Profit Before Tax has been adjusted for dividends and other Director emoluments.
For more information please contact:
John McArthur/Max Cawthra, Tracsis plc
Tel: 0845 125 9162
Dominic Emery/Matt Lewis, Investec Bank plc
Tel: 020 7597 4000
Rebecca Sanders Hewett, Redleaf PR
Tel: 0207 382 4730