TransCore owner Roper buys United Toll Systems

November 8, 2009
By Peter Samuel

Roper Industries, Inc (NYSE: ROP) owners of TransCore say they have bought toll system supplier United Toll Systems LLC (UTS), until now privately held by founder, CEO/President Jim Allen of Montgomery Alabama. Roper bought the leading north American toll system supplier TransCore in 2004 and their purchase of UTS is a major consolidation of the industry.

The purchase of UTS was announced by Roper Friday simultaneously with the purchase of a medical device manufacturer called Verathon. Verathon and UTS together cost Roper $356m, and Roper say the two are expected to add $140m to 2010 revenue and at least $38m to EBITDA.

Last year Roper reported revenue of $2306m, EBITDA of $529m. They don't report the results of subsidiaries such as TransCore.

They say the existing management is "expected to continue in place." That's in line with Roper's handling of TransCore when they took them over five years ago, although that was their first foray into toll systems. With the addition of UTS they will likely want to push specialization if not integration of the two units.

Overlap and differences

There's considerable overlap between TransCore and UTS, but also differences. Both have competed for system integration and toll services work. But unlike TransCore, UTS has never been into its own transponder-reader systems.

UTS developed out of being a toll bridge developer in Alabama in the mid 1990s, building and operating three toll bridges in that state. There they pioneered basic Windows-based plaza systems.

The bridges were sold to a Macquarie subsidiary in May 2006.

Increasingly from the late 1990s UTS got into toll systems.

For a number of years UTS competed directly with TransCore and others for complete toll system integration contracts, their most notable wins being Miami-Dade Expressway and Central Texas Turnpike (45N, TX130, Loop1) under contract to TxDOT.

Most recently UTS major emphasis has been improved sub-systems - lane controllers, smart loops, video tolling, open road toll integration and service oriented gantries.

Examples:

UTS is the only US company to offer a competing smart loops system to the market leader Idris from Diamond of the UK. The UTS in-pavement axle-counting and separation system is called IVIS for Intelligent Vehicle Identification System.

Another UTS system VCARS for Vehicle Capture and Recognition Systems uses unusual stereoscopic digital color cameras and integrated double strobe lights for video tolling.

TekTrak is a UTS track and rail system for mounting and servicing open road toll equipment on light gantries.

Roper say in their announcement of the buy of UTS:

"With unique and patented technology, remote monitoring capabilities, new lane and camera configurations and system integration capabilities, UTS provides expanded hardware and software solutions for the toll industry."

UTS seems to have been dominated from the beginning by Jim Allen, who founded the company in 1993, and has been its chief salesman, spokesman, strategist, financier and manager.

Roper

Roper say they specialize in an 'asset light business model,' that is buying only firms without heavy investment in fixed capital equipment. They buy existing businesses in what they see as a growth area, then strengthen their position with what they call 'bolt-ons' or acquisitions of complementary firms.

The 2004 TransCore buy was Roper's first entry into a growth area - electronic tolling - and now the UTS buy seems to be a 'bolt-on.'

At the end of 2008 Roper had about 7900 employees, 5800 in the US, 2100 outside.  The company is managed out of Sarasota Florida.

Chairman of the board, president and chief executive is Brain D Jellison. T Rowe Price is the largest single shareholder.

See list nearby of top ten shareholders, who hold 41% of Roper stock.  

see http://www.roperind.com

http://unitedtoll.com

earlier reports: http://www.tollroadsnews.com/node/1312

http://www.tollroadsnews.com/node/2354

TOLLROADSnews 2009-11-07

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