Tracsis lines up deal for MPEC
Tracsis, a Derby-based provider of software and consultancy services to the rail industry, has said it is in advanced talks to acquire MPEC Technology in a deal worth up to £3m. MPEC Technology, which is also based in the city, develops and supplies data logging technology to the rail industry.
MPEC's main product is the SA380 data logger, which records information from track side infrastructure on the railway such as signals and level crossings.
The business, which also has an operation in Australia, employs nine members of staff who will remain with the company after the acquisition has been completed.
Tracsis, which also has a base in Leeds, said it generated revenue of £818,813 in the year to 31 March 2010 and pre-tax profit of £266,454.
The proposed consideration comprises an initial cash payment of £900,000; the issue of £100,000 worth of ordinary shares in Tracsis at an issue price of 50p; and deferred consideration of up to £1m, depending on the financial performance of MPEC during a two year period.
Further additional consideration of up to £1m is also payable depending on the level of cash in MPEC at completion.
Tracsis said it thought there would be "significant synergies shared" between the businesses within the transport sector. Any integration would be aided by both businesses being based in close proximity to each other in Derby, said the company.
In its financial year to 31 July 2010, Tracsis reported increased turnover of £2.65m – boosted by the acquisition of Loughborough-based Safety Information Systems.
This "excellent progress" had been maintained into the first-half of 2011 with revenue up by 23 per cent to £1.2m. Having identified several favourable growth indicators within the transport markets such as record passenger journeys and consumer spending on the railways, the business said earlier this year that it was looking out for suitable acquisitions.
