Acquisition signal following due diligence

DUE DILIGENCE: Jamie Lane, based in transaction services at the South Coast office of Smith & Williamson in Southampton.

Petards Group plc,  an AIM-quoted developer of advanced security and surveillance systems, engaged the expertise of a Southampton-based consultancy for an acquisition deal.

Jamie Lane, based in  transaction services at Smith & Williamson, which provides accountancy, investment and tax advisory services, was appointed by Petards.

The appointment followed a competitive tender for due diligence services.

RTS Solutions (UK) Ltd and its parent company RTS Solutions (Holdings) Ltd (together ‘RTS’), a specialist transportation software engineering company, joined Petards following Smith & Williamson’s review of the financial aspects of the target business.

Jamie, who works at Smith & Williamson’s South Coast office, said: “Following a competitive tender, our remit was to look at RTS’ financial performance and its assets and any liabilities, providing proactive support to Petards through to completion.

“RTS figures showed it was profitable and debt-free, with a history of excellent cash generation. More than half of revenues related to recurring software licences, maintenance and support contracts, which provided further trading confidence

“Speaking generally, it is essential in any due diligence work that nothing falls through the cracks, so the potential acquirer is confident of the target’s future prospects and past performance.”

Leeds-based RTS provides web-based safety-critical applications in real time to customers involved in operational, engineering and maintenance programmes.

Its principal customers are currently Network Rail, which owns and operates the railway infrastructure in England, Wales and Scotland, and Network Rail’s major contractors.

Network Rail oversees 20,000 miles of track, 30,000 bridges, tunnels and viaducts and thousands of signals, level crossings and stations. RTS operates as an independent company within the Petards Group, which is headquartered in Guildford, from RTS’ offices at Holbeck Rail Depot, Leeds.

Jamie added: “It was a privilege to be involved in the deal, which saw all RTS staff retained. Petards is strengthening its software solutions offering through the strategic acquisition, with an entry into the UK rail infrastructure market complementing the Group’s existing eyeTrain on-board train systems.

“The security and surveillance systems market in the UK is a new era of incredible connectivity in our digital age, with the Internet of Things enabling secure data flows, analytics, interoperability and remote management in a way that could barely be imagined just a few years ago.”

Petards’ eyeTrain provides digital on-train surveillance and helps maximise safety and performance for train-operating companies and train builders.

Ends

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Disclaimer

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

The tax treatment depends on the individual circumstances of each client and may be subject to change in future.

Note to editors

Smith & Williamson is an independently owned financial and professional services group. The firm is a leading provider of investment management, financial advisory and accountancy services to private clients, professional practices, entrepreneurs and mid-to-large corporates. The group’s c1,700 people operate from a network of twelve offices: London, Belfast, Birmingham, Bristol, Cheltenham, Dublin (City and Sandyford), Glasgow, Guildford, Jersey, Salisbury and Southampton.

Smith & Williamson LLP
Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International. The word partner is used to refer to a member of Smith & Williamson LLP.

 

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