Proposed acquisition of RWA Rail Limited
Tracsis plc ("Tracsis" or the "Company"), the provider of labour resource optimisation software for the transport sector, is pleased to announce that it has entered into an agreement to acquire the entire issued share capital of RWA Rail Limited ("RWA" or "RWA Rail"). RWA is a provider of consultancy services to the rail sector, focusing on operational and strategic planning and will enable the group to provide a wider range of projects to a more diverse client base in the rail sector.
The Company is also pleased to announce a placing to raise £200,000 by the issue of 373,832 new Ordinary Shares at 53.5p per share to satisfy institutional demand. The net proceeds of the Placing, being £194,000, will further increase the cash resources available to the Enlarged Group for working capital and possibly further acquisitions.
The Acquisition and Placing are conditional upon the approval of Shareholders at the GM.
ACQUISITION HIGHLIGHTS:
- RWA is a specialist provider of consultancy services to the rail sector focusing on operational and strategic planning.
- Robert Watson, founder and Managing Director of RWA Rail, will join the board of Tracsis as Chief Operating Officer.
- RWA generated revenue of £1,019,000 in the year ended 31 March 2008 resulting in EBIT of £293,000.
- RWA will strengthen the Enlarged Group's position within the rail sector.
- An initial cash consideration of £580,000 and the issue of 1,084,113 new Ordinary Shares, subject to an adjustment mechanism depending on the net assets of RWA on Completion.
- Deferred consideration of up to £145,000 in cash and up to 271,029 Deferred Consideration Shares may be payable, subject to satisfaction of certain performance criteria following the Acquisition.
- In view of the size of the Acquisition, in relation to the Company, the Acquisition constitutes a reverse acquisition under the AIM Rules.
- It is expected that dealings in the shares of the Enlarged Group will become effective on 5 August 2008.
TRADING UPDATEThe board is also pleased to announce today that given the visibility of revenue under contract, the Board believes that revenue for the year to 31 July 2008 will be approximately £800,000 for the existing Tracsis business.
John McArthur, Tracsis CEO, Commented:
"Tracsis and RWA operate within the same sector and have a similar customer profile. Our vision remains as before: to become a leading provider of operational planning software and consultancy services within the rail market, with the ultimate aim of providing these services to global transport markets. Today's announcement is a step towards this vision. I welcome Robert to the Board of Tracsis and look forward to working with him and his team." Robert Watson, Commented;
"Tracsis has what I believe to be unique resource optimising software; the Enlarged Group will be better able to exploit the capabilities of this software, as well as developing further the strategic and operational planning business of RWA Rail."Enquiries:
Tracsis plc 0845 125 9162John McArthur
Haggie Financial 020 7417 8989Nicholas Nelson
Kathy Boate
Zeus Capital 0161 831 1512Alex Clarkson
Ross Andrews
Bobby Fletcher
INTRODUCTION The Company announces that it has entered into an agreement to acquire the entire issued share capital of RWA Rail Limited for an initial cash consideration of £580,000 and the issue of the Consideration Shares, subject to adjustment depending on the net assets of RWA on Completion. In addition, deferred consideration of up to £145,000 in cash and up to 271,029 Deferred Consideration Shares may be payable, subject to the satisfaction of certain performance criteria following the Acquisition.
The Company also announces a placing to raise £200,000 by means of the issue of the Placing Shares at the Placing Price in order to satisfy institutional demand. Further details of the Placing are set out in this announcement and the Admission Document.
In view of the size of the Acquisition, in relation to the Company, the Acquisition constitutes a reverse takeover under the AIM Rules and, as such, is conditional upon the re-admission of the Existing Ordinary Shares and admission of the Consideration Shares to trading on AIM and the publication of an admission document. In addition, the Acquisition also requires the approval of Shareholders. Accordingly, a General Meeting is being convened on 4 August 2008 at which Shareholders will be asked to approve the Acquisition. If the resolution is approved by Shareholders, it is expected that Admission will take place, and that dealings on AIM will commence, on 5 August 2008. The Placing is conditional upon completion of the Acquisition.
Provided that the resolution is approved, the approval of Shareholders is not required to issue the Consideration Shares or the Placing Shares as the Company already has sufficient shareholder authorities in place to issue such shares. However, in order to give the company flexibility going forward shareholders will also be asked to grant the Directors authority to allot Ordinary Shares up to an aggregate nominal value of £25,282 being equivalent to one third of the Enlarged Issued Share Capital and to disapply statutory pre-emption rights in relation to 15 per cent. of the Enlarged Issued Share Capital.
The admission document in relation to the proposed Acquisition, Placing, Admission and General Meeting (the "Admission Document") has been posted to shareholders today and is available on the Company's website www.tracsis.com.
BACKGROUND TO AND REASONS FOR THE ACQUISITION Tracsis was incorporated in January 2004 to commercialise resource optimisation software that assists with automating the process of labour scheduling for passenger rail and bus companies in the transport sector.
In November 2007, the Company's Ordinary Shares were admitted to trading on AIM and £2 million, before expenses, was raised by way of a placing of new Ordinary Shares.
RWA provides consultancy services to the rail sector, focussing on operational and strategic planning. It is engaged in timetable, resource planning and performance modelling assignments for customers operating within the rail industry.
The Board believes that the acquisition of RWA Rail is likely to result in the following synergies and growth opportunities within the Enlarged Group:
- the addition of new services to those currently offered by Tracsis;
- the provision of additional labour resource and the appointment of Robert Watson to the Board of the Company;
- an increase in the client base; and,
- the strengthening of the Enlarged Group's market position within the rail sector.
TERMS OF THE ACQUISITION The Company has conditionally agreed to acquire the entire issued share capital of RWA Rail from its sole shareholder, Robert Watson.
The initial consideration payable comprises cash consideration of £580,000 and the Consideration Shares at the Consideration Share Price. The cash amount payable will be adjusted on a pound for pound basis if the Net Asset Value at Completion exceeds or falls below £450,000, subject to a cap to the adjustment of £350,000 if the Net Asset Value is above £450,000. The full adjustment may be payable, due to a period of strong trading by RWA Rail since its 31 March 2008 year end.
Deferred consideration of up to £290,000 is payable subject to; (a) RWA achieving EBITDA of not less than £280,000 for the 12 month period following Completion; or (b) the Enlarged Group achieving EBITDA of not less than £700,000 for the year ended 31 July 2009. If either of these conditions are not met, and RWA achieves EBITDA of less than £100,000, the deferred consideration will be nil. If RWA achieves EBITDA of between £100,001 and £279,999, the deferred consideration will be equal to £16.11 for every £10.00 of EBITDA in excess of £100,000 for the 12 month period following Completion.
The Deferred Consideration will be satisfied as to 50 per cent. in cash and 50 per cent. by the issue of the Deferred Consideration Shares at the Consideration Share Price.
The cash will be financed out of the Company's existing cash resources. At 31 January 2008, being the date of the unaudited interim results, the Company had cash and cash equivalents of £2.268 million.
THE PLACINGThe Company proposes to raise approximately £200,000, before expenses, by the allotment and issue of 373,832 new Ordinary Shares at the Placing Price pursuant to the Placing. The Placing Shares will represent approximately 1.97 per cent. of the Enlarged Issued Share Capital of the Company immediately following Admission.
Pursuant to the Placing Agreement, Zeus Capital has conditionally agreed to place, with institutional investors, the Placing Shares at the Placing Price to satisfy demand for Ordinary Shares. The net proceeds of the Placing being, £194,000, will further increase the cash resources available to the Enlarged Group for working capital and possibly, further acquisitions.
The obligations of Zeus Capital under the Placing Agreement are conditional, inter alia, on:
the Placing Agreement becoming or being declared unconditional in all respects and not being terminated in accordance with its terms before 8.00 a.m. on 5 August 2008 (or such later time and/or date, being not later than 8.00 a.m. on 12 August 2008, as Zeus Capital may agree); and Admission.
Application will be made to the London Stock Exchange for the re-admission of the Existing Ordinary Shares and the admission of the Placing Shares and the Consideration Shares to trading on AIM. It is expected that Admission will become effective, and dealings in the Enlarged Issued Share Capital will commence, on 5 August 2008.
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16/12/08 - Tracsis COO becomes Doctor
Tracsis and RWA would like to congratulate Robert Watson on receiving his doctorate from the department of Civil and Building Engineering at Loughborough University, with thesis titled “Train Planning – An Exploration of Processes and Systems” – well done Dr Watson!
Tracsis is pleased to announce it has completed the purchase of RWA Rail. RWA Rail is a leading provider of consultancy for the rail industry, focusing on operational and strategic planning. The move will consolidate Tracsis' place in the industry through a strengthened product offering and broadened technical and operational expertise. 
Tracsis will be demonstrating the TrainTRACSTM software suite at this year’s rail industry planning conference held by Network Rail. The conference, which is an annual event, is one of the most important events on the UK rail industry calendar and is usually attended by all major passenger and freight operating companies together with the Department of Transport, the ORR (Office of Rail Regulation) and Transport Scotland.
Tracsis is pleased to announce it has entered into a contractual relationship with West Coast Trains for use of the TrainTRACSTM intelligent scheduling software. West Coast Trains is owned and operated by Virgin Trains.
Tracsis is pleased to announce it has entered into a contractual relationship with Cross Country for use of the TrainTRACSTM intelligent scheduling suite. Covering around 1,500 route miles and calling at over 100 stations - stretching from Aberdeen to Penzance, and from Stansted to Cardiff - CrossCountry is the most extensive rail network in the UK.