Acquisition

RNS Number:1244S
ITIS Holdings PLC
17 November 2003

Monday 17th November 2003


ITIS ANNOUNCES AGREED TERMS FOR THE STRATEGIC ACQUISITION OF GROUND BREAKING
TRAFFIC COLLECTION TECHNOLOGY


INTRODUCTION

ITIS Holdings plc ("ITIS" and including its subsidiaries, "the Group"), a
leading UK road traffic information and data specialist, is pleased to announce
that it has finalised exclusive terms for the acquisition by its wholly-owned
subsidiary, ITIS UK Limited, of certain assets of Israel based Estimotion Inc.,
and Estimotion Ltd. ("Estimotion") (the "Acquisition"). The initial
consideration is US$0.3m with further payments of up to a maximum US$4.2m
payable over the next three years.  The principal activity of Estimotion is the
use of low cost and patented technology to provide a unique system for measuring
and forecasting traffic flow based on anonymously sampling the position of
mobile phones. The Directors believe the Acquisition is an important strategic
move to further enhance ITIS' strong position in the fast growing market for
real time and predictive traffic information.



The Estimotion system complements ITIS's existing traffic information
application, which has universal coverage of the UK Strategic Road Network.
ITIS believes that the Estimotion technology will greatly enhance its own FVD
(Floating Vehicle Data) in urban areas because of the significantly higher
concentration of mobile phones here and because there is no major city in the
world which does not support a mobile phone
network.



The terms of the Acquisition have been structured to minimise its impact on
ITIS' financial performance.  Initial consideration of US$0.3m is payable in
cash to Estimotion on completion.  Further payments up to a maximum of US$4.2m
are due over the three years following completion and are reliant upon the
achievement of certain milestones, a major part of which are linked to the
financial performance of ITIS.



Whilst Estimotion's turnover has been negligible to date, the low level of
operating costs is anticipated to have little impact on ITIS' financial
performance, particularly when balanced against the forecast upside of
commercialising this technology and the associated projected revenues.



BACKGROUND TO AND REASONS FOR THE ACQUISITION

Over the past two years, the Group has made significant technical and commercial
progress, resulting in its recognised position as a leading traffic information
provider.  ITIS is credited with establishing the world's first commercial
application for Floating Vehicle Data ("FVD") and has been successful in using
FVD to generate growing revenues in the automotive, mobile telephony, Government
and logistics sectors in the UK.  Customers include the Automobile Association
(AA), BMW, Ford Motor Company, Highways Agency, Toyota and Vodafone.  The
Acquisition allows ITIS to utilise information already collected by cellular
networks as part of their day-to-day operations to further develop the business
in those areas that have already proven to be commercially successful.  These
include RDS-TMC (the delivery of traffic information directly into a vehicle
satellite navigation system) and ITIS' telephone traffic services, which are
available across all networks on short dial numbers, such as 2222 on Vodafone.



ITIS has started to receive serious enquiries outside of the UK from government
organisations and from its existing international customers.  As a result of
this, negotiations are already in advanced stages with several mobile networks
to use their data to launch traffic information services based on the Estimotion
technology.  Whilst FVD is both scaleable and now operates on a fixed cost
basis, ITIS believe that it will be more cost effective and quicker to deploy
Estimotion's technology in these new markets.  Estimotion will enable ITIS to
provide highly accurate urban traffic data as a result of the large
concentration of mobile phones in urban areas.  This will be of particular use
to those cities looking at congestion charging or with chronic traffic problems.










REASONS FOR ANNOUNCEMENT

The Board expect completion of this transaction shortly and have chosen to
announce details today to coincide with the Interim Results and also the start
of the ITS World Congress in Madrid where ITIS is meeting  with potential and
existing customers and wishes to demonstrate and discuss this exciting new
technology.





INFORMATION ON ESTIMOTION

Estimotion, Inc. was founded in July 2000 and employs seven people in the design
and development of its technology.   The founders of Estimotion, led by Dr.
Israel Feldman, have developed their various applications using their knowledge
of sophisticated defence technology.  All the employees are shareholders in
Estimotion and will be employed by a new Group subsidiary based in Israel
established to accelerate the development of the Estimotion technology.



Estimotion has developed patented technology which provides a unique and high
quality system for measuring and forecasting real time traffic flow based on
anonymously sampling the positions of mobile phones.  Whilst an individual
record of a mobile phone's position is typically less accurate than a
corresponding GPS record, this is compensated by the large number of mobile
phones on any road, knowledge of the underlying road network and the application
of statistical techniques.  Estimotion has developed a full working
demonstration site with high success, using live mobile phone data in the Tel
Aviv area of Israel, and has calibrated the results against traffic simulation
models and loop data.  These results are similar to the correlation that ITIS
has found between FVD and loop detectors on the M25.  Estimotion has also
successfully filed a US patent with 149 claims and this complements the US
patent "Instantaneous Traffic Monitoring System", which the Group acquired from
Holland Technologies LLC (formerly Info Move Inc.) on 1 November 2002.





                                    - Ends -




NOTES TO EDITORS:



*     ITIS Holdings plc, listed on AIM, is the UK's leading provider of traffic
information services. ITIS has invested in the development of a unique system
for the collection and analysis of traffic information; it combines information
from the Automobile Association (AA) traffic control centres with ITIS historic
and real time Floating Vehicle Data (FVD) to provide journey time forecasts and
real time updates. ITIS now operates the largest commercial application of FVD
anywhere in the world, and delivers the content over a variety of platforms
including RDS-TMC (Alert C), digital radio and automated telephone services
(IVR) under the AA RoadWatch brand.



*     TMC is a European-developed and standardised means of delivering real time
traffic information.  Traffic data from moving probes is collected and analysed
by ITIS, and is then transmitted directly to the TMC receiver using a carrier of
the Classic FM radio network, which provides coverage of 90% of the strategic
road network.   ITIS operates the only national TMC service in the UK under
licence from the Radio Authority/Ofcom until 2012



            Transmitted data is decoded by a receiving device such as a
satellite navigation system and translated into text or speech traffic alerts.
By combining traffic information delivered via RDS-TMC with the re-routing
facilities offered by satellite navigation systems, drivers are finally afforded
dynamic avoidance of traffic congestion. ITIS provides this service in the UK,
amongst others, to BMW and Ford.



*     ITIS provides traffic data to all mobile phone providers. To receive
up-to-date traffic and travel information direct from your mobile phone, call
401100 from any network, 2222 from Vodafone or 2020 from T-mobile



*     For further information, please visit www.itisholdings.com or
www.navtrak.com.


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