Tracsis Plc, a provider of software for the rail industry, rose to the highest since its shares started trading in 2007 after agreeing to buy Sky High Plc, the U.K.’s largest provider of traffic analysis and surveys.
The shares rose 5.4 percent to 184.5 pence at the close of trading in London. The volume was five times the three-month daily average. The stock has more than tripled since the start of last year, giving the Leeds, England-based company a market value of 39.7 million pounds ($60.2 million).
Tracsis agreed to pay 15.25 pence a share, valuing Sky High at 3.3 million pounds, it said in a statement today. The offer was 77 percent higher than the average closing price over the past six months. Tracsis has made at least five acquisitions since 2007, according to data compiled by Bloomberg.
“We are constantly on the lookout for interesting technology and businesses,” Chief Executive Officer John McArthur said in a telephone interview. “We kissed a lot of frogs to find this one.”
The combination of Tracsis and Sky High “adds considerable breadth, depth and scale to our existing offering,” McArthur said in the statement. “We see great cross-selling opportunities of both services and technology to this new market, whilst expanding our reach overseas given the considerable presence Sky High has in Australia.”
Tracsis software is used by rail companies to draw up crew rosters and optimize rolling stock use. Clients include Stagecoach Group Plc, operator of the U.K.’s busiest rail service, Network Rail, the owner of British train tracks and stations, and National Express Group Plc.
The Australian rail freight market served by Sky High is very interesting for Tracsis because of the mining industry, McArthur said.
“We couldn’t sell into the Australian rail market without having a physical presence there,” he said. “At the moment Australia is a better bet than the U.S.” There is still a lot of business to go for in the U.K. rail freight market, he said.
Sky High’s independent directors agreed to vote 10.8 million shares, or 67 percent of the eligible shares, in favor of the transaction, according to the statement.
Sky High was founded in 1989 and its clients include government agencies, private sector companies and public sector groups. It has offices in Melbourne, Brisbane and Sydney. Its head office is in Tadcaster, about 15 miles (24 kilometers) from Tracsis.
Tracsis’s pretax profit for the six months ended Jan. 31 rose 50 percent to 1.7 million pounds, the company said in a statement on March 4.