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Petards Group acquires rail software firm for £1.5m
Security and surveillance system developer Petards Group has acquired Leeds-based rail software specialist RTS Solutions for around £1.5m.
The £1.5m consideration is comprised of an initial cash payment of £1m and deferred consideration of up to £0.5m conditional upon RTS meeting certain financial and other targets during the 12 months ending 31 March 2019.
Furthermore, a payment of £0.6m will also be made on a pound-for-pound basis for surplus cash on the acquired firm's balance sheet.
AIM-traded Petards said that RTS, which generated revenues of £778,000 and reported a profit before tax of £262,000 last year, will operate as an independent company from its offices at Holbeck Rail Depot in Leeds and all staff will be retained within the business. Petards said it expects the acquisition to be earnings accretive in its first full year as part of the group.
With main customers including Network Rail and its main contractors, RTS specialises in web-based transportation software, including incident and fault management, work site management, resource management, machine plant management, and asset/inventory management applications. More than 50% of revenues come from recurring software licences, maintenance and support contracts.
Petards chairman Raschid Abdullah said: "We are delighted to welcome RTS and its staff to the Petards Group and look forward to working with them to further develop and grow its business. This acquisition marks a further step in the broadening of the group's portfolio of products, providing the opportunity to expand its earnings and enhance shareholder value."
As of 0913 BST, Petards Group's shares were up 0.78% at 26.00p.