North American Rail Acquisition

14 March 22

Tracsis plc

("Tracsis" or the "Group")

Tracsis, a leading provider of software, hardware, data analytics/GIS and services for the rail, traffic data and wider transport industries, is pleased to announce that it has acquired RailComm LLC (“RailComm”) a North American based rail technology software and services provider.

Headquartered in Fairport, New York and established in 1999, RailComm provides mission critical automation and control solutions that reduce costs, increase safety, and improve operational efficiency for rail passenger/freight operators and rail served ports/industrials. Its two core products are rail yard automation and computer aided dispatching and it has a wide and diversified client base across the North American market. The business has good levels of annual recurring software revenues in addition to large project delivery/systems integration work. The business employs around 30 full-time staff, all of whom will remain with the business post transaction.

The acquisition is in line with Tracsis’ strategy of extending its rail software footprint and expanding 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. This will enable Tracsis to progressively market its existing portfolio of rail products and services, with Remote Condition Monitoring the initial area of focus.

For the financial year ended 31 December 2021, RailComm delivered revenue of $6.0m (£4.6m) including c$2.5m (£1.9m) of recurring software revenue and generated an unaudited loss before tax of $0.3m (£0.2m). It has a significant order book, and as a result we anticipate good levels of revenue and profit growth going forward. The business is being acquired on a debt free basis.

The acquisition consideration comprises an initial cash payment of $11.5m (£8.8m). Additional contingent consideration of up to $2.7m (£2.1m) is payable subject to RailComm achieving certain financial targets in the first full year post acquisition. This cash will be held in escrow through that period. The consideration will be funded out of Tracsis cash reserves.

Chris Barnes, Chief Executive Officer of Tracsis plc, commented:

"This is an important strategic acquisition for Tracsis plc, 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. 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, commented:

“The RailComm team is very excited about joining the Tracsis Group. 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.”

Notes:

  1. The US$ values quoted in this announcement are also shown in £s by converting the US$ values at an exchange rate of $/£ of 1.31.

  2. The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.

Enquiries:

Tracsis plc | Tel: 0845 125 9162
Chris Barnes, CEO
Andy Kelly, CFO

finnCap Ltd | Tel: 020 7220 0500
Christopher Raggett / Charlie Beeson, Corporate Finance
Andrew Burdis, Corporate Broking

Alma PR | Tel: 020 3405 0205 Rebecca Sanders-Hewett / David Ison / Joe Pederzolli
tracsis@almapr.co.uk