Cubic Strengthens NextCity and NextMission Strategies with the Completion of Delerrok and PIXIA Acquisitions
January 06 2020 - 7:02AM
Business Wire
Acquisitions to enhance growth priorities for
Cubic Transportation Systems and Cubic Mission Solutions business
segments
Cubic Corporation (NYSE:CUB) today
announced the completion of the acquisitions of Delerrok, a
provider of a cloud-hosted, multi-agency fare collection platform
for small- to mid-sized transit operators, and PIXIA, a provider of
high performance, cloud-based solutions to manage and access
massive amounts of imagery data. Cubic acquired the remaining 82.5
percent of Delerrok’s outstanding equity for $36.4 million. In
prior fiscal years, Cubic paid $6.5 million to purchase the initial
17.5 percent of Delerrok’s outstanding equity. The transaction is
expected to be neutral to Adjusted EPS by fiscal year 2021 and
accretive beginning fiscal year 2022. Additionally, Cubic acquired
the remaining 80 percent of the outstanding equity of PIXIA for
$200 million. Cubic had paid $50 million to purchase the initial 20
percent of the outstanding capital stock of PIXIA, representing a
multiple of less than 11 times on full calendar year 2020 Adjusted
EBITDA. As announced on November 20, 2019, the combined
transactions are included in our guidance for fiscal year 2020 and
are expected to contribute approximately $40 million in Sales, $15
million of Adjusted EBITDA and add approximately $0.20 to Adjusted
EPS for fiscal year 2020.
Cubic leverages Delerrok’s TouchPass platform in combination
with its Transit-Management-as-a-Service (TMaaS) platform to
deliver a comprehensive set of payment, mobile and real-time
information solutions at an affordable price. PIXIA enhances
Cubic’s Command and Control, Intelligence, Surveillance and
Reconnaissance (C2ISR) digital platform and further enables
real-time, cloud strategy to provide information to the edge of the
battlefield.
“With Delerrok, we will deliver full-featured electronic fare
collection benefits to small- and mid-market transportation
customers; and with PIXIA’s proven track record of supporting the
defense and intelligence community with managing geospatial data,
we will further strengthen our C2ISR business,” said Bradley H.
Feldmann, chairman, president and chief executive officer of Cubic
Corporation. “We are pleased to welcome both Delerrok and PIXIA to
our Cubic family and look forward to accelerating our key growth
priorities in our NextCityTM and NextMissionTM strategies.”
“Being recognized by Cubic, the world leader in large-scale,
account-based fare collection systems, is validation of our mission
to make the features of big-city fare systems accessible to small-
and mid-sized agencies through TouchPass, our cloud-based
fare-collection-as-a-service offering,” said Bob Hamilton,
president and chief executive officer of Delerrok. “Joining with
Cubic allows us to take TouchPass to the next level.”
More than 70 percent of transit agencies in North America are
dependent on cash and paper-based fare products. The fare
collection-as-a-service model offers automatic fare collection as a
subscription service, enabling agencies to quickly launch the
platform at a lower implementation and operating cost. Delerrok’s
solution offers a full suite of ticketing options, giving agencies
the ability to provide travelers with the benefits of electronic
ticketing, while allowing access to deeper insights into agency
operations through enhanced and actionable data.
“We are honored and excited to join the Cubic team. We will
continue to offer our customers the highest standard of commercial
software for data management and dissemination and will now be able
to vastly expand that offering by integrating Cubic’s state of the
art software and hardware capabilities to provide more end-to-end
solutions,” said Rudi Ernst, chief executive officer of PIXIA Corp.
“I cannot think of another company that would be more synergistic
to what we have created over the past two decades.”
PIXIA offers cloud-based platforms designed to manage and share
large amounts of imagery data, wide-area motion imagery and
geospatial data for the U.S. Intelligence Community, Department of
Defense and other government customers. PIXIA also offers
commercial software-based solutions to support disconnected users
at the tactical edge. PIXIA focuses on enabling U.S. government
operators, intelligence analysts and policy makers to rapidly and
efficiently access, manage and distribute large data to generate
actionable intelligence. PIXIA specializes in live and dynamic
data, beyond still imagery and video, which enables users to manage
and share data from the Cloud to the cargo pocket.
About Cubic Corporation
Cubic is a technology-driven, market-leading provider of
integrated solutions that increase situational understanding for
transportation, defense C4ISR, and training customers worldwide to
decrease urban congestion and improve the militaries’ effectiveness
and operational readiness. Our teams innovate to make a positive
difference in people’s lives. We simplify their daily journeys. We
promote mission success and safety for those who serve their
nation. For more information about Cubic, please visit
www.cubic.com or on Twitter @CubicCorp.
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Media Contact Laura Chon
Corporate Communications Cubic Corporation PH: 858-505-2181
Laura.Chon@cubic.com
Investor Contact Kirsten
Nielsen Investor Relations Cubic Corporation PH: +1 212-331-9760
Kirsten.Nielsen@cubic.com
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