Singapore, 3 October 2021 – Singapore Technologies Engineering Ltd (ST Engineering) today announced that it has entered into an agreement to acquire all the ownership interests in TransCore Partners, LLC and TLP Holdings, LLC (collectively TransCore) from an indirect wholly-owned subsidiary of Roper Technologies, Inc. (the Acquisition). The aggregate purchase price for the Acquisition is US$2.68 billion (S$3.62 billion) in cash on a cash-free and debt-free basis, subject to certain purchase price adjustments.
The Acquisition will accelerate ST Engineering’s Smart City growth and position it as a market leader in Smart Mobility. TransCore has more than 80 years of history, and is a leader in the transportation industry in North America. It provides innovative technical solutions and engineering services for applications encompassing next-generation electronic toll collection, congestion pricing, Intelligent Transportation Systems (ITS), back office solutions and RFID products. TransCore is contracted to deliver a congestion pricing project in Manhattan, New York, the first ever in the U.S.
“The Smart City space has been an important strategic focus area for ST Engineering. TransCore is a strong strategic fit for us and its road transportation solutions will complement and enhance our suite of Smart Mobility rail and road solutions. With this acquisition, we will be uniquely positioned as a Smart Mobility market leader, underpinned by our strengths in technology and innovation. This acquisition demonstrates our continued commitment to create long-term value for our shareholders through sustainable global growth,” said Vincent Chong, Group President & CEO of ST Engineering. “Roper management has well guided and supported TransCore in their growth journey to become a leader in the transportation industry in North America. We value the opportunity to work with the Roper team on this acquisition.”
Acquisition Provides Strategic and Financial Benefits
The addition of TransCore will advance ST Engineering’s leadership position in developing Smart City solutions to enable smarter and sustainable cities, and at the same time will deliver value for ST Engineering’s shareholders. The acquisition rationale includes:
“With this acquisition, our Smart City businesses will be better positioned to capture growth at the intersection of urbanisation, digitalisation and sustainability. TransCore’s market leading end-to-end tolling solutions and congestion pricing businesses, supported by a strong track record of execution and talented team, are poised for global expansion as part of ST Engineering group. We are committed to continue delivering excellent customer service and project execution for TransCore’s customers,” said Chew Men Leong, President of Urban Solutions at ST Engineering.
“ST Engineering will be a great owner for TransCore and will support the business as it pursues the next phase of its innovative work in traffic management, tolling technology, and smart city infrastructure,” said Neil Hunn, Roper Technologies’ President and CEO. “We are grateful to Tracy Marks, TransCore’s President, and the entire TransCore team for their many contributions to Roper.”
Continued Investment in TransCore
TransCore has a strong management team and talented workforce, and ST Engineering is committed to invest in the team and grow the business going forward. With the global scale, networks and resources of ST Engineering, the combined business will be able to better meet demand and better serve its customers in the smart mobility sector.
Details of the Acquisition
The Acquisition translates to a EV2/EBITDA3 multiple of 16.2 times after accounting for tax benefits.
Based on the unaudited financial statements of the TransCore business for the six (6) months ended 30 June 2021, the profit including discontinued operations that have not been disposed and before income tax and non-controlling interests is approximately US$54 million (S$72 million).
The transaction is expected to close by the end of the first quarter of 2022, subject to regulatory approvals, customary closing conditions and approval from ST Engineering’s shareholders at an Extraordinary General Meeting to be convened.
1Source: PTOLEMUS Consulting Group (2021)
2EV refers to purchase consideration less PV of tax benefits.
3EBITDA is based on TransCore’s audited financials for financial year ended 31 December 2020 excluding corporate allocations from Roper.
View the SGX announcement and presentation slides for the acquisition, and listen to the recording of the analyst and media briefing.
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