Quarterhill to Acquire Conduent Tolling Solutions Business

Quarterhill Inc. has announced its entry into a definitive asset purchase agreement to acquire substantially all of the assets of the tolling solutions business of Conduent Business Services, LLC for a total consideration of $70 million. The transaction, which is expected to close in the fourth quarter of 2026, represents a significant strategic move for Quarterhill, poised to triple its tolling revenue upon completion. This acquisition will also result in a combined backlog of approximately $2 billion, enhancing the company's long-term revenue visibility.

Quarterhill Inc., headquartered in Toronto, is recognized as a leading innovator in the Intelligent Transportation System (ITS) sector, providing advanced AI-driven solutions that enhance transportation efficiency and safety. The tolling solutions business of Conduent, which serves government transportation agencies primarily in the United States and the United Kingdom, offers a comprehensive suite of services including electronic toll collection and automated license plate recognition. This acquisition aligns with Quarterhill’s strategy to bolster its market position by integrating Conduent's established technology and extensive agency relationships.

The strategic rationale behind this acquisition is clear. By integrating Conduent's tolling capabilities, Quarterhill aims to create a more robust platform that not only increases its revenue but also improves operational efficiencies. The anticipated synergies from the merger are expected to yield a pro forma revenue of over $400 million annually, with an adjusted EBITDA margin projected between 10% and 15%. This combination of scale and expertise positions Quarterhill to better serve its clients and expand its profitability in a competitive market.

The tolling sector is experiencing dynamic changes, driven by the increasing demand for smart transportation solutions that improve traffic management and reduce congestion. As governments invest in infrastructure upgrades and digital transformation initiatives, the need for comprehensive tolling solutions is expected to grow. Quarterhill’s acquisition of Conduent’s tolling business positions it strategically to capitalize on these trends, offering a wider array of services and enhancing its competitive edge in the marketplace.

In conclusion, this transaction not only signifies a transformative step for Quarterhill but also reflects broader trends in the ITS sector, where consolidation and technological advancement are key themes. As the market continues to evolve, Quarterhill's strengthened position through this acquisition may lead to increased opportunities for growth and innovation, ultimately benefiting transportation agencies and the traveling public alike. The successful integration of Conduent's tolling solutions will be critical in realizing these potential benefits and achieving long-term value creation for shareholders.