£3.4m deal secures Tracsis’ fourth purchase

TRANSPORT software group Tracsis has completed the purchase of a data-logging firm in a deal worth up to £3.4m.

The Leeds-based firm, which designs and licences software to improve train crew and rolling stock scheduling and rostering, said it has agreed a deal to buy MPEC Technology Limited, a Derby-based group.

MPEC supplies data-logging and remote monitoring technology to the rail industry. Its kit is used in trackside equipment ranging from level crossings to signals.

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The MPEC deal comprises an initial cash payment of £900,000, another £100,000 of new shares, plus a conditional payment of up to £1m depending on the company’s financial performance over the next two years. Tracsis will also pay up to £1.4m to cover MPEC’s cash.

“We are delighted to have completed this latest acquisition, being our fourth in four years since our initial public offering in 2007,” said Tracsis chief executive John McArthur.

“MPEC is an exciting addition to the Tracsis Group being what we believe to be a market leader in its respective field of data logging and remote monitoring equipment for the rail industry.

“We believe the business to be well run with a team of experienced employees and we are delighted to be working with them.

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“We look forward to working together with the MPEC team to grow the MPEC business both in the UK and overseas.”

MPEC earned profits of £266,454 in the year to the end of March 2010 on revenues of £818,813. It had net assets of £513,240 and is debt-free. It has nine staff.

Tracsis’s latest acquisition gives it ‘black box’ technology, similar to that found in aircraft, which constantly records data from pieces of equipment.

MPEC’s technology can be remotely monitored, enabling maintenance crews to tell when a piece of equipment is failing. “You can move from ‘fail and replace’ to a preventative maintenance strategy,” said Mr McArthur.

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Earlier this week Tracsis raised £1.95m to fund its growth through a placing of new shares, attracting four new institutional investors. The company issued 4.3m new ordinary shares at 45p each, and they begin trading on the Alternative Investment Market on June 6. After the placing and MPEC share issue it will have more than 24m shares in issue.

Shares in Tracsis were flat at 50p yesterday.

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