Rekor, itself only five years old, is buying out Southern Traffic Services, which has been in operation since 1988. STS, headquartered in the Pensacola, Fla., area, has deployed thousands of monitoring devices across the country to collect a variety of data including pedestrian and bicycle counts, traffic volume and vehicle weights. It then sells that data to public-sector customers, including state departments of transportation such as those in Ohio, Florida, Pennsylvania, Georgia and others.
The company has worked with roughly half of the states, and claims more traffic data collection devices than any other firm.
The deal, with a value up to $14.5 million depending on STS meeting performance goals, will give Rekor two important business assets: data and customer relationships.
Rekor’s technology revolves around traffic data; it essentially sells traffic managers and emergency responders in government intelligence about what’s happening on the roadways they’re responsible for. For example, last year Rekor acquired the company Waycare to give it the ability to show officials where and when traffic collisions are most likely to occur. That kind of insight relies, in part, on the types of data STS collects.
As for customers, STS has long-standing relationships with exactly the public-sector agencies Rekor wants to work with, with a particularly strong presence in the southeastern U.S. According to a press release, the acquisition will expand Rekor’s presence by 60,000 lanes of traffic covering hundreds of thousands of square miles.
“Southern Traffic Services has specialized in traffic data collection for over 30 years, and their in-house expertise and capabilities will bring immediate benefit to Rekor’s customers,” Rekor CEO and Chairman Robert Berman said in the statement. “With a well-developed network of data collection sites throughout the United States, this addition to our portfolio of products and services will help us both strengthen our technology distribution capabilities and expand Rekor’s geographic footprint and customer base.”
Rekor was formed in 2017 through a merger involving a special purpose acquisition company. By merging together the companies Brekford Corp. and AOC Key Solutions into what amounted to a hollow corporate structure, the two businesses were able to enter the Nasdaq Stock Market.
Rekor expects STS to generate $15 million in revenue in fiscal year 2022, about half of which is recurring. Rekor itself earned about $14.3 million in fiscal year 2021.
