Tracsis plc Acquires RailComm

Written by William C. Vantuono, Editor-in-Chief
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U.K.-based Tracsis plc, a provider of software, hardware, data analytics/GIS and services for the rail, traffic data and wider transport industries, has acquired Fairport, N.Y.-based rail technology software and services provider RailComm LLC in an all-cash transaction.

The acquisition, which Tracsis said took place “on a debt-free basis,” comprises an initial cash payment of $11.5 million, with an additional contingent consideration of up to $2.7 million 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. For the financial year ended Dec. 31 2021, RailComm reported revenue of $6 million including $2.5 million of recurring software revenue, and generated an unaudited loss before tax of $0.3 million. RailComm said it “has a significant order book, and as a result we anticipate good levels of revenue and profit growth going forward.”

Tracsis said acquisition of RailComm, now called “RailComm, a Tracsis Company,” is in line with its strategy of “extending our rail software footprint and expanding the addressable markets for 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.”

“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,” said Tracsis plc CEO Chris Barnes. “We are delighted to welcome all of the RailComm team into the Tracsis Group and look forward to a successful future working together.” RailComm employs around 30 full-time staff, all of whom will remain with the business post transaction. 

“The RailComm team is very excited about joining the Tracsis Group,” said RailComm LLC President Joe Forgione. “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.”

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; the company notes it has “a wide and diversified client base across the North American market” and “good levels of annual recurring software revenues in addition to large project delivery/systems integration work.”

Tracsis plc said its products and services “are widely used to increase efficiency, reduce cost and risk, improve operational and asset performance, improve safety management and decision-making capabilities and improve the overall customer experience for clients and customers. The Tracsis Group is split into two principle operating areas:

• Rail Technology & Services, “a software and technology/product led business. It develops and supplies software that solves complex resource, asset optimisation and control problems for Train Operators and Smart Ticketing, Delay Repay and other retail software to improve the customer experience for rail users. It also develops remote condition monitoring hardware, data acquisition software, safety and risk management software solutions for rail infrastructure providers.”

• Data, Analytics, Consultancy & Events, “a largely services-led business that focuses on data capture, data analytics, GIS, earth observation, data insights, consultancy, and event traffic management within a range of transport and pedestrian rich environments.  The business provides technology/bespoke products and data that underpins large scale intelligent transport system and smart city planning and positive environmental decision making.”

Tracsis notes that it has a “blue-chip client base that includes all major U.K. transport owning groups, Network Rail, passenger and freight train operating companies, the Department for Transport, TfL (Transport for London), multiple local authorities, major outdoor music and sporting event organizers, and a wide variety of large engineering and infrastructure companies. In North America, clients include Class I, II and III freight railroads, transit operators, and several large rail-served ports and industrials. The business drives growth both organically and through acquisition and has made 17 acquisitions since 2008.”

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