PIPS Technology, which has offices in Southampton, England, and Knoxville, Tenn, USA., designs and manufactures automatic number plate recognition (ANPR) technology and optical character recognition (OCR) software. ANPR solutions are used in journey time measurement systems, police applications, toll enforcement, congestion charging, road user charging, parking systems, traffic monitoring and automated site security. ANPR-enabled cameras are used on emergency vehicles, and at access entry and tolling points to capture licence plate details for tolling and law enforcement purposes.

"This acquisition fits tightly with our plans to significantly expand our market-leading set of public safety and security solutions for emergency managers, first responders and law enforcement agencies. Under Alan Sefton's leadership, PIPS has built a commanding position in the U.K. and other European markets, and has established a technology leadership position in the developing U.S. market. Federal Signal is uniquely positioned to accelerate the technology deployment in the US, as municipal and homeland security initiatives will increasingly deploy licence plate recognition technology. ANPR is also used for enforcing congestion tolling systems in city centers, and for the nation's expanding toll road networks. The growth rate for this technology should approach 20% per annum for the next several years" says Robert D. Welding, president and CEO, Federal Signal.

"Consistent with our stated plan of shifting our investment base to our higher-growth security and well-being portfolio, we have recently engaged an investment bank to help us explore divestiture alternatives for our non-strategic industrial tooling assets," adds Welding.

PIPS will be immediately integrated into Federal Signal's Safety and Security reporting to Group President David R. McConnaughey, and the number technology will be leveraged across Federal Signal's enterprise-wide portfolio.

Federal Signal estimates the transaction to be immediately modestly accretive, and add approximately US$.05-.06 per share to 2008 earnings.