One of the UK’s largest construction and civil engineering groups has completed the acquisition of a multi-award winning technology company that is a leading supplier of equipment to the country’s transportation sector.
The Costain engineering group has announced that it has completed the purchase of Simulation Systems (SSL), a provider of innovative technology-based systems and services, primarily for the highways sector, but with the potential for wider application across the group’s activities. SSL has been acquired for a total cash consideration of £17m (US$22m) on a debt free/cash free and normalized working capital basis, and the consideration has been funded from Costain’s existing cash and debt facilities. In the year ended March 31, 2015, SSL generated revenues of £15.1m (US$19.5m) and EBITDA of £2m (US$2.6m). SSL will be fully integrated into Costain’s infrastructure division in the current financial year, and is expected to be earnings enhancing from 2017. SSL’s senior management team, including Louis Thompson, the current managing director, will remain with the business.
Established in 1979, and with a current staff of 165 people, SSL provides integrated hardware- and software-based systems across a broad spectrum of traffic monitoring and management requirements. SSL has an established blue-chip customer base including Highways England (HE), Transport for London (TfL), the Scottish and Welsh governments, and a number of English county and city councils. The company also works closely with the country’s leading traffic technology suppliers, engineering and infrastructure consultancies, and highways agency contractors. SSL will further enhance Costain’s technology capability, as part of the group’s strategic focus on delivering a broad range of innovative integrated services to the major customers that are spending billions of pounds upgrading and renewing the UK’s energy, water and transportation infrastructures.
A winner of the Queens Award for Enterprise Innovation in 2013, SSL’s range of core activities encompasses: the design and manufacture of traffic management equipment, including CCTV cameras, digital CCTV surveillance systems and traffic monitoring and control systems; the provision of integrated systems, including Design Manual for Roads and Bridges-compliant tunnel control systems, motorway outstation equipment, message sign controllers, and motorway indicators; web applications; and the supply of related maintenance and test equipment. In April this year, SSL won the contract for HE’s M25 Junctions Traffic Signaling Enhancement Project, which will include the integration of its traffic signal modules with Siemens’ Stratos platform.
Costain’s chief executive, Andrew Wyllie, said, “We are delighted to announce the acquisition of SSL which is in line with our stated objective of accelerating the growth of business through a combination of organic and acquisitive growth. This transaction will further broaden our ability to deliver innovative technology-based solutions to meet the increasingly complex requirements of our major blue-chip customers in energy, water and transportation.”