The buyout, which was financed using existing cash balances and funds available under the company’s revolving credit facility, was announced on Thursday.
Federal Signal President and CEO Robert D. Welding said:
“This acquisition fits tightly with our plans to significantly expand our market-leading set of public safety and security solutions for emergency managers, first responders and law enforcement agencies. Under Alan Sefton’s leadership, PIPS has built a commanding position in the U.K. and other European markets, and has established a technology leadership position in the developing US market.”
ANPR technology from PIPS is used for a number of applications, including automated site security, toll enforcement and on emergency vehicles. Welding said he thinks Federal Signal is uniquely positioned to accelerate the technology deployment in the US as homeland security initiatives shift towards licence plate recognition technology.
“The growth rate for this technology should approach 20% per annum for the next several years,” he said.
PIPS will be immediately integrated into Federal Signal’s Safety and Security Systems Group, reporting to Group President David R. McConnaughey. The number plate recognition technology will be leveraged across Federal Signal’s portfolio.
Federal Signal estimates the deal will add approximately five to six cents per share to 2008 earnings.
