Singapore Technologies Engineering (ST Engineering) has entered into an agreement to acquire all the ownership interests in TransCore Partners and TLP Holdings (TransCore) from an indirect wholly-owned subsidiary of Roper Technologies. The aggregate purchase price for the acquisition is US$2.68 billion on a cash- and debt-free basis, subject to certain purchase price adjustments.

The acquisition will accelerate ST Engineering’s smart city technology and services 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 rapid frequency identification products. TransCore is contracted to deliver a congestion pricing project in Manhattan, New York – the first ever in the US.

“The smart city space has been an important strategic focus area for ST Engineering,” says Vincent Chong, ST Engineering group president and CEO. “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.”

TransCore’s electronic toll collection, congestion pricing and ITS solutions are highly complementary to ST Engineering’s smart, integrated mobility solutions and will result in a comprehensive suite of smart mobility offerings for customers. The North America electronic toll collection and ITS markets, in which TransCore has leadership positions, are expected to grow from US$2.5 billion in 2021 to more than US$4 billion in 2030.

The firm’s leading position in the end-to-end electronic toll collection and congestion pricing segments in North America represents a new business for ST Engineering. This business combination allows for cross-selling of ST Engineering’s current ITS solutions such as smart road junctions, transportation operation centres and road traffic optimization systems to North America. At the same time, TransCore’s electronic toll collection and congestion pricing solutions could be offered to customers in the Southeast Asia region where ST Engineering has a strong presence.

The acquisition translates to an EV/Ebitda (enterprise value/earnings before interest, taxes, depreciation and amortization) multiple of 16.2 times after accounting for tax benefits. It is expected to be cash flow positive from the first year and earnings accretive from the second year, post-acquisition.

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.