TagMaster closes acquisition of Sensys Networks
TagMaster closes acquisition of Sensys Networks
Stockholm Sweden 14 June, 2019
TagMaster AB (publ) (“TagMaster”), a leading manufacturer and supplier of advanced sensor systems for Smart Cities, has completed the acquisition of Sensys Networks Inc (“Sensys Networks”). The acquisition was previously announced on May 3, 2019. The purchase price was USD 16 million on a debt and cash free basis with adjustment of net working capital as of the closing date against normalized net working capital.
Sensys Networks, established 2003, is a leading provider of advanced data solutions for Intelligent Transportation Systems (ITS). Sensys Networks offers a comprehensive wireless platform, addressing today’s most challenging traffic and parking data needs. This end-to-end solution, comprised of sensors, edge gateways and highly sophisticated data management software (SNAPS), has been deployed in hundreds of cities globally, addressing the growing need for data driven traffic and parking solutions.
Sensys Networks is headquartered in Berkeley, California, and is led by industry veterans who bring years of experience in wireless communications, carrier grade infrastructure, enterprise software and transportation management for the public sector.
Sales for 2018 was approx. USD 15 million with an EBITDA of approx. – USD 1.7 million. After cost reductions, implemented during January 2019, the EBITDA for Sensys Networks 2019 is expected to be positive.
Background and acquisition rationale
The past year confirms the validity of the TagMaster’s chosen strategy of focusing on growth within the Traffic Solutions business segment. While Rail projects demonstrate high profitability, the major growth is in Traffic Solutions. Cities and other densely-populated areas worldwide face challenges of rapid growth, rising populations, climate change, declining air quality and forced urban development, which places new demands on transportation systems. Meeting these challenges requires Smart City solutions that streamline traffic and transportation systems, making day-to-day life simpler, safer and more efficient.
Sensys Networks’ products are deployed as part of several ITS applications including Traffic Signal Control, Traveler Information Systems, Tolling and Road Pricing, Safety and Enforcement. The ITS market is estimated to be $66B globally by 2024, with growth driven largely by the increasing global demand for Smart City solutions.
”TagMaster is very excited about this important step in our growth strategy, as Sensys Networks makes us stronger in the ITS and Smart City markets. With the combined expertise of Sensys Networks and TagMaster, we have excellent revenue growth opportunities in both US and European markets” says Jonas Svensson, CEO, TagMaster.
Commenting on the acquisition, Amine Haoui, Sensys Networks CEO, said “We are very pleased to be joining the TagMaster group. We recognise and welcome the strength that the union will bring to both brands and the synergies that are immediately apparent with the other TagMaster companies.”
The combined company
Both Sensys Networks and TagMaster are leading technology providers in the Smart Cities sector, selling direct and through channel partners to end users such as authorities and road operators.
The acquisition provides the companies with an enhanced capacity for creating future products and solutions in the US and Europe, as well as a platform to deliver next-generation infrastructure to smartphone (“I2X”) applications for connected travelers and autonomous vehicles. I2X has significant market potential from agencies, OEMs, fleets and other smartphone enabled travelers.
The combined entity will have enhanced scale and reach with 2018 proforma revenue and EBITDA of SEK 326 million and SEK -2.7 million respectively. The EBITDA for 2019 is expected to be positive.
The acquisition was funded through a combination of debt facilities, an equity issue with preferential rights to existing shareholders and a directed equity issue with deviation from existing shareholders preferential rights. The debt facility amounted to USD 5,7 million and the remaining part of the purchase price was financed through the equity issues of approx. SEK 130 million.
Cirio Advokatbyrå is legal adviser to TagMaster in connection with the acquisition and the equity financing, Mayer Brown LLP is legal advisor in connection with the acquisition and Redeye AB is acting financial advisor in connection with the equity financing.
For further information please contact:
Jonas Svensson, CEO, +46 8-6321950, firstname.lastname@example.org
TagMaster is an application driven technology company that designs and markets advanced sensor systems and solutions based on radio and vision technology (RFID, Radar and ANPR) for demanding environments. Business areas include Traffic Solutions and Rail Solutions sold under the brands TagMaster, CitySync, Balogh, CA Traffic, Magsys and Hikob with innovative mobility solutions in order to increase efficiency, security, convenience and to decrease environmental impact within Smart Cities. TagMaster has dedicated agencies in the US and in China and exports mainly to Europe, The Middle East, Asia and North America via a global network of partners and systems integrators. TagMaster was founded in 1994 and has its headquarters in Stockholm. TagMaster is a public company and its shares are traded on First North stock exchange in Stockholm, Sweden. TagMasters certified advisor is Erik Penser Bank phone +4684638300, E-mail: email@example.com