ST Engineering strikes largest acquisition with TransCore deal
The deal is expected to be completed in Q1 of 2022.
ST Engineering’s (STE) announced its plans to acquire Roper Technologies' TransCore, OCBC reported.
The deal is currently valued at $3.62b and is expected to be accomplished by the first quarter of 2022. To date, this is set to be the largest acquisition by the company.
TransCore offers road transportation solutions, including electronic toll collection in North America. Once the transaction is completed, STE will be able to penetrate the said region's electronic toll collection and congestion pricing market.
This will be funded by debt and cash, which would lead to an increase in net gearing.
Pre-acquisition, TransCore has achieved $72m (USD54m) pre-tax profit in the first half of 2021 and has a $1.63b (US$1.2b) backlog as of 31 July 2021. This is expected to add $58m in profit after tax from the 2023 financial year onwards, considering the 25% corporate tax, 2% cost of debt and 90:10 debt-cash funding.