LONDON, UK: Pennant International Group (AIM: PEN) has acquired the entire issued share capital of Track Access Productions Limited (TAP).
Based in Bedfordshire, Track Access Productions (TAP) was established in 2001 and provides driver training, route mapping and route familiarisation services to the UK rail industry.
Clients comprise train operating companies, freight operating companies, engineering prime contractors and infrastructure providers.
Phil Walker, Group CEO, commented: “I am delighted to confirm the acquisition and to welcome the TAP team into the Pennant Group. TAP is an excellent business with a long-standing, trusted reputation in the UK rail market and we look forward to working together to integrate TAP into Pennant’s growing rail offering.”
The payment for the Acquisition includes an enterprise value of £585,000 and approximately £389,000 for TAP’s free cash, after factoring in working capital and debt repayment adjustments.
The initial payment for the Acquisition is roughly £798,500, which consists of 70% of the enterprise value (i.e., £409,500) plus the Cash Free, Debt Free Adjustment. A completion payment of £638,610 has been made based on estimated calculations of the Cash Free, Debt Free Adjustment. A final payment of around £160,000 is expected to be made within the next two months once completion accounts are produced.
The remaining payment for the Acquisition is a deferred payment of £175,500 (30% of the enterprise value) due 12 months after completion. The acquisition agreement includes standard warranties and indemnities regarding title, tax, and commercial matters, as well as buyer protections such as limitations on the vendors’ future activities and setoff rights.
The Group is funding the entire Acquisition from its existing cash resources.
The Acquisition will benefit the Group by consolidating its presence in the market, generating an estimated revenue of £850,000 in 2023, and providing an improved offering to a wider customer base. It also aligns with the Group’s strategy by enhancing recurring revenues, expanding into civilian markets, and strengthening the rail products and services aspect of the Group’s offerings, which complements its traditional core of IPS software and training technology.
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