Quarterhill Inc. (TSX: QTRH) (OTCQX: QTRHF), has entered into a definitive agreement to acquire 100 percent of the outstanding equity of Richardson, Texas-based Electronic Transaction Consultants LLC from Align Capital Partners for total cash consideration of $150.0 million plus transaction related expenses, to be funded by a combination of cash-on-hand and debt financing. Completion of the acquisition is subject to certain closing conditions. All amounts are in Canadian dollars unless otherwise stated.
ETC is a provider of tolling and mobility systems.
“This is a transformational acquisition that will significantly diversify Quarterhill’s financial results, bring scale to our ITS business and expand our presence in the tolling market, where we see strong growth trends,” said Paul Hill, Quarterhill’s CEO. “Roads and bridges in the U.S. are in need of expansion and repair at a time when government authorities are under tight budget constraints. Tolling solutions like those offered by ETC are essential in helping to pay for and sustain these infrastructure investments. With the U.S. federal government recently completing an infrastructure bill that will provide billions in additional funds for road repair and development, we believe ETC is well-positioned to benefit from these industry tailwinds. ETC will operate as a stand-alone entity within the Quarterhill ITS portfolio, pursuing its own organic growth and tuck-in acquisition strategy.”
“We believe Quarterhill shares our vision for the growth and potential in ITS, and in particular for tech-enabled tolling as an essential solution to help expand, upgrade and support transportation infrastructure. We believe joining Quarterhill will offer us a platform for growth and scale in both our core U.S. market, as well as globally,” said Bret Kidd, ETC’s CEO. “Our focus on quality solutions and superior customer service has rewarded us with many long-standing customer relationships that have expanded over time, and we will continue to deliver on these core value drivers as part of Quarterhill.”
Norton Rose Fulbright is serving as legal advisor to Quarterhill and JD Merit is serving as Quarterhill’s financial advisor on this transaction. McGuireWoods is serving as legal advisor to ETC and Align Capital Partners.