Sensys Networks' parent company, TagMaster, acquires Citilog in France

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TagMaster AB (publ) (“TagMaster”), a leading supplier of data solutions and advanced sensor systems for intelligent transportation solutions within the Traffic and Rail markets, acquires all outstanding shares in Citilog SAS (“Citilog”) from Axis AB. The purchase price is approx. €3,4 million on a debt and cash free basis.

Citilog is adding a wealth of AI and deep learning software capabilities to the company.

TagMaster AB (publ) (“TagMaster”), a leading supplier of data solutions and advanced sensor systems for intelligent transportation solutions within the Traffic and Rail markets, acquires all outstanding shares in Citilog SAS (“Citilog”) from Axis AB. The purchase price is approx. €3,4 million on a debt and cash free basis.

Citilog was the first company to introduce video-based automatic incident detection in 1997. With more than twenty years of research and development in the field of analytics applied to traffic solutions, Citilog has constantly demonstrated a strong commitment to optimizing its solutions for the traffic industry.

In 2019 Citilog introduced the first incident management analytics module based on deep learning technology. Today, Citilog has a broad portfolio of cutting-edge algorithms and products based on deep learning that can be used as both edge solutions and cloud-based solutions. Citilog is focusing on four main application areas: incident management, traffic efficiency, traffic statistics and remote parking enforcement.

Citilog is headquartered in Paris with a subsidiary in the US, and is led by industry veterans who bring years of experience in video-based traffic management solutions for smarter mobility. Citilog has more than 45,000 cameras and sensors deployed in over 60 countries around the world.

Sales for 2020 were approx. $7 million (€5.8 million) (mainly software), with an EBITDA of approx. – $0.7 million (€0.6 million). After planned cost optimization during 2021, the EBITDA for Citilog 2022 is expected to be positive and reach margin levels at par with the current group level.

Background and acquisition rationale

The past year has confirmed the validity of TagMaster’s strategy of focusing on growth within the Traffic Solutions application segment. Cities and other densely populated areas worldwide face challenges of rapid growth, rising populations, climate change, declining air quality and forced urban development, which places new demands on transportation systems. Meeting these challenges requires Intelligent Transportation Solutions that streamline traffic flow and contribute to the necessary shift to a more sustainable and safer transportation system.

Citilog products are deployed as part of several ITS applications including Incident Management, Traffic Signal Control and Traffic Statistics. The Incident Detection market is estimated to be $500 million globally by 2024*, with growth (CAGR >15%) driven largely by the increasing global demand for Smart City solutions.

”TagMaster is very excited about this important step in our growth strategy, as Citilog makes us stronger in the ITS market. Citilog is also adding a wealth of AI and deep learning software capabilities to the company, and with the combined expertise of Citilog, Sensys Networks and TagMaster, we have excellent revenue growth opportunities in both US and European markets,” says Jonas Svensson, CEO, TagMaster.

Commenting on the acquisition, Eric Toffin, Citilog, said “We are very pleased to be joining the TagMaster group. We recognise and welcome the strength that the union will bring to both brands and the synergies that are immediately apparent with the other TagMaster companies.”

The combined company

Both Citilog and TagMaster are leading technology providers in the ITS sector, selling direct and through channel partners to end users such as agencies and road operators. Citilog’s video-based edge analytics will be a very important additional detection technology within TagMaster’s growing multi-modal ITS data solutions. Accurate detection and actionable data establish the foundation for future ITS systems.

The acquisition provides the companies with an enhanced capacity for creating future products and data solutions in the US and Europe, as well as a platform for future business models such as selling detection as a service (DaaS). There will be a very clear and direct cooperation between Citilog and Sensys Networks within sales and development, and higher margin software will become a much larger part of our future group revenue.

TagMaster and Citilog will continue to cooperate with Axis as partners.

The combined entity will have enhanced scale and reach, with 2020 pro forma revenue and adjusted EBITDA of approx. $41 million (€34 million) and $2.4 million (€2 million) respectively.

Financing

The acquisition is an all-cash transaction and will be funded through a combination of new debt facilities and cash at hand. Approx. $3.3 million (€2.8 million) is secured in a new loan.

The acquisition closed in April, 2021.

Advisers

Cirio Advokatbyrå and DS Avocats (Paris) are legal advisers to TagMaster in connection with the acquisition.

For further information please contact:
Jonas Svensson, CEO, +46 8-6321950, jonas.svensson@tagmaster.com

This information is information that TagMaster AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 20.00 CEST on April 28, 2021.

About TagMaster
TagMaster is an application driven technology company that designs and markets advanced sensor systems and solutions based on radio, radar, magnetic and vision technology for demanding environments. Business areas include Segment Europe and Segment USA sold under the brands TagMaster and Sensys Networks with innovative mobility solutions in order to increase efficiency, security, convenience and to decrease environmental impact within Smart Cities. TagMaster has subsidiaries in the UK, France and US, and exports mainly to Europe, the Middle East, Asia and North America via a global network of partners and systems integrators. TagMaster was founded in 1994 and has its headquarters in Kista. TagMaster is a public company and its shares are traded on Nasdaq First North Premier Growth Market in Stockholm, Sweden. TagMaster’s certified advisor is FNCA Sweden, phone +46852800399, E-mail: info@fnca.se, http://www.tagmaster.com

*According to a report by MarketsandMarkets, February 2020

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Bill Weber
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