Transport software firm Tracsis has bought rail management software company Datasys Integration for £4.5m.
Datasys supplies the majority of the UK’s train operating companies including First Group, Go-Ahead, Stagecoach, National Express, Arriva, and Virgin.
Tracsis chief executive John McArthur said Datasys will fit well with Leeds-based Tracsis as both have similar customers but operate in totally different areas.
“Datasys is exactly what we look for in an acquisition,” he said.
“It is a well run, profitable technology business with a good footprint in the rail industry.
“Datasys looks at the root causes of delay and performance related incidents. It helps railways companies to capture an event on the railway.”
He added that there will be no job losses following the deal.
“There’s an overlap for the customer base, but not for the product base,” he said.
In its last financial year Manchester-based Datasys made pre-tax profits of £290,000 on revenue of £2.3m.
The business is debt free and has cash balances of £1.3m and tangible net assets of £400,000.
Datasys employs 17 staff, all of whom will remain with the business with the exception of departing shareholder directors who are not involved with day to day operations.
Analysts welcomed the deal.
Eric Burns at WH Ireland said: “Datasys is a provider of rail management software systems, applications and hosting and will therefore be highly complementary to Tracsis’s existing software offering and increase the group’s recurring revenue element.
“This deal should be materially value enhancing for Tracsis, particularly in 2015, its first full year of ownership.
“Tracsis’s successful track record of growth coupled with niche acquisitions has quite rightly earned it a premium rating and we remain buyers.”
Datasys is Tracsis’ sixth acquisition since flotation seven years ago.
Mr McArthur said the company will continue to look for potential acquisitions that fit with Tracsis and will be earnings enhancing.