Proposed Acquisition

RNS Number : 3823H

Tracsis PLC

26 May 2011

 



Tracsis plc

("Tracsis" or the "Company")

Proposed Acquisition

The Company confirms today that it is in advanced discussions to acquire the entire issued share capital of MPEC Technology Limited ("MPEC").

MPEC is a niche developer and supplier of data logging and remote monitoring technology to the rail industry. Its main product is the SA380 data logger which records information from critical track side infrastructure on the railway such as signals and level crossings. MPEC has its head office in Derby and employs 9 members of staff who will remain with the business going forward.

As set out in MPEC's abbreviated accounts for the period ending 31 March 2010, MPEC had a net asset value of £513,240 on that date. During the same period, it also generated revenue of £818,813 and a profit before tax of £266,454 (as set out in unaudited management accounts for the period). The business is currently debt free.

The proposed consideration comprises (i) an initial cash payment of £900,000; (ii) the issue of £100,000 worth of ordinary shares in Tracsis at an issue price of 50p and (iii) deferred consideration of up to £1,000,000, to be made over two years, depending on the financial performance of MPEC during that period.  Additional consideration of up to £1,000,000 is also payable which is reflective of the level of cash in MPEC. The consideration will be subject to adjustment depending on the actual net current assets of MPEC at completion.

The directors believe that, if the transaction was to complete there will be significant synergies shared between Tracsis and MPEC given the respective offerings of each company within the transport sector.  These synergies, and subsequent integration of MPEC, will be further aided due to both businesses being based in close proximity to each other in Derby.

A further announcement will be made in due course if the acquisition is progressed.

For more information please contact:

John McArthur, Tracsis plc	Tel: [phone]
Katy Mitchell, WH Ireland Limited	Tel: [phone]

 

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