Tagmaster AB, a leading manufacturer and supplier of advanced sensor systems for smart cities, has now completed the acquisition of Sensys Networks Inc. The original intention to acquire the company was previously announced at the beginning of May and 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 normalised net working capital.
Sensys Networks headquartered in Berkeley, California, was established in 2003, and is a leading provider of advanced data solutions for Intelligent Transportation Systems (ITS). The company 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.
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. According to Grand View Research, the ITS market is estimated to be $66B globally by 2024, with growth driven largely by the increasing global demand for smart city solutions.
The combined entity will have enhanced scale and reach with 2018 proforma revenue of SEK 326 million and EBITDA of SEK -2.7 million. 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
