Mesa, Arizona-based Verra Mobility says it plans to acquire Indianapolis-based parking technology firm T2 Systems for about $347 million in a deal expected to close by the end of the year.
T2, founded in 1994, provides parking-management hardware and software to universities, municipalities, parking operators, health care facilities and transportation hubs. It has more than 1,900 customers. The company is owned by Chicago-based software investment firm Thoma Bravo.
Verra said it plans to pay Thoma Bravo $347 million for T2, plus an additional amount of up to $9 million related to an impending asset acquisition by a T2 subsidiary.
T2 said its leadership and operations will not change post-acquisition, and all jobs will be retained. T2 has 272 employees, including 84 in Indianapolis, 88 elsewhere in the United States and 100 in Canada. The company is expected to operate as a standalone business unit within Verra Mobility.
Verra provides mobility hardware and software solutions including highway toll management, speed and red-light enforcement camera systems, and registration and title management for vehicle fleets, among other things. About 54% of Verra’s revenue comes from commercial customers such as rental car companies and fleet operators, with the other 46% coming from government customers, including state and local government entities, police departments and school districts.
“With the rapid growth of ride-sharing and last-mile delivery, cities need innovative solutions to solve traffic issues and optimize curbside management,” Verra President and CEO David Roberts said in a written statement. “Verra Mobility’s photo enforcement solutions coupled with T2 Systems’ parking technology will put us in a strong position to help cities adapt to these emerging complexities.”
As of Dec. 31 Verra had 640 employees, 585 of whom were based in the U.S.
“The combination of our unified parking and mobility management platform and Verra Mobility’s expertise in intelligent transportation systems will help deliver a streamlined transportation experience,” T2 CEO Adam Blake said in written remarks.
According to an investor presentation from publicly-held Verra, T2 had $69 million in revenue during the 12-month period ending Sept. 30, and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, of $19 million.
During that 12-month period T2 earned 54% of its revenue from software-as-a-service sales. It earned another 21% of revenue from hardware sales.
For the 12-month period ending Sept. 30, Verra had revenue of $481 million and adjusted EBITDA of $237 million.
Following the acquisition, Verra plans to maintain the T2 brand and operate T2 Systems as a business unit within its larger company.
Before Thoma Bravo acquired T2 in 2016, the Indianapolis company had been owned by Charlotte, North Carolina-based venture capital firm Pamlico Capital.