Brady plc purchases ScrapRunner from Enaptive Inc.

London-based Brady plc, a leading global provider of trading, processing and risk management solutions for metals, recycling, energy and soft commodities, has announced that it has acquired the assets and goodwill of the ScrapRunner product from Enaptive Inc., Jacksonville, Florida. ScrapRunner is a dispatch system designed specifically for the scrap metal and recycling industry markets and has been operating since 2003. Its clients are based throughout North America and Europe.

According to Brady, it will pay $2 million (approximately £1.3 million) for ScrapRunner, $1.8 million of which will be paid in cash on completion, $100,000 of which will be paid in cash one year after completion and $100,000 of which will be paid in cash two years after completion, subject to any amounts that may become payable to Brady under the indemnifications. This consideration includes working capital of $200,000 that will be adjusted by a completion accounts verification process. The acquisition is expected to be earnings enhancing in 2015, Brady says.

ScrapRunner’s unaudited draft accounts for the year ended Dec. 31, 2014, show revenue of $2 million, 62 percent of which are recurring, generating a profit before tax of $694,000. As at Sept. 4, 2015, unaudited net assets were approximately $157,000, Brady reports.

Brady says its directors believe the acquisition has “a compelling strategic, commercial and financial rationale,” in particular:

• The ScrapRunner solution manages complex container pickup and delivery scheduling, tracks the location of containers and tracks and reports on the activity and location of trucks using global position system (GPS) tracking. These abilities will broaden Brady Recycling’s product and facilitate further growth.
• ScrapRunner has more than 70 clients today and drivers using 1,943 hand-held applications with fleet sizes ranging from one to 500 trucks.
• ScrapRunner can be licensed for on-site hosting by the customer or licensed on a recurring revenue, software as a service (SaaS) basis. Currently, approximately 30 customers are using the SaaS solution which will be the ongoing license model.
• ScrapRunner has proved to be a successful partner for Brady, and the two companies have 14 common clients, including nine of the top 10 North American recycling companies.
• As with previous acquisitions, overlaying Brady’s routes to market, salesforce and commercial infrastructure is expected to accelerate the growth of ScrapRunner.
• Individuals employed by ScrapRunner have significant industry experience that will further aid the group.
  
  

“Brady’s expertise in recycling and scrap solutions combined with ScrapRunner’s strength in dispatch solutions creates an excellent platform to drive further revenue growth,” Brady adds.

Gavin Lavelle, Brady CEO, says, “The U.S. scrap market is worth $100 billion in turnover, and 50 percent of this is already transacted using Brady software, with seven of the top 10 recycling companies using Brady. We believe recycling represents a significant opportunity for Brady and are confident that the combined ScrapRunner/Brady group can increase our global market share even further.”

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He continues, “ScrapRunner is the leading dispatch solution designed for the recycling and scrap markets and is highly complementary to our solutions, presenting opportunities to cross and up-sell on a global basis. ScrapRunner also provides further domain knowledge in the recycling and scrap markets and overall provides exciting new growth opportunities.”