Tracsis pays out £19.5m for software group

TRANSPORT software firm ​Tracsis ​is to pay up to £19.5m for​ ​Ontrac, an award-winning software development and IT solutions company that work​s​ with clients in the transport, construction, and local government sectors. ​
By The Newsroom
Published 2nd Dec 2015, 17:14 BST

Leeds-based Tracsis said Ontrac works extensively within​ the UK rail sector where it is helping to digitise operations.

It added that Ontrac will be highly complementary to Tracsis’ existing software development and consulting division, and offers strong cross-sell and up-sell opportunities across the group.

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​Tracsis said the business is debt free, and has a history of strong organic growth coupled with “excellent” cash generation.

It employs 30 staff, all of whom will remain with the business. Ontrac generated revenue of £7.1m​ in the year to January 31​​ and underlying pre-tax profit of £2.4m.

​​John McArthur, chief executive of Tracsis, said: “This acquisition 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.”​

Analysts welcomed the deal.

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Pointing out that this is Tracsis’ largest deal to date, WH Ireland’s Eric Burns said: “Ontrac works within the UK rail industry including process intensive workflows and hence offers overlap with Tracsis’ existing software solutions.

“The deal is Tracsis’ second this year and its eighth since joining AIM in 2007 and represents a step change in quantum both in terms of price paid and profitability.”

​​Tracsis said that a​s a result of the​ acquisition,​ ​​its annual results will exceed market forecasts.

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