Goldman Sachs invests in video toller American Traffic Solutions

Goldman Sachs (GS) have negotiated a substantial minority share in traffic camera specialists American Traffic Solutions (ATS) of Scottsdale Arizona, providing the company with fresh capital to fund their growth. GS becomes the first institutional investor in ATS, says the ATS president, Jim Tuton. The big New York based investment banker will get two positions on Tuton's seven person board of directors.

Raheel Zia, a vice president in the Principal Investment Area at Goldman Sachs says they were attracted to the industry and then identified ATS as "a leader with
 tremendous growth potential, an exemplary track record and a high quality management team."

Tuton was a pioneer in traffic camera enforcement when he set up a "photo radar"  system for the small community of Paradise Valley in the Phoenix area in 1987. ATS has become a major supplier of cameras to toll agencies, first for enforcement in transponder-only toll lanes, and now in video or camera-based toll collection in the context of all-electronic, open road tolling.

The company is developing a major business in video tolling for rental car customers under the brandname PlatePass. They cater to customers of Avis, Budget, Hertz and Advantage, and have an interoperable camera-based toll system that covers all toll facilities in Florida, Texas and Colorado.

Red light running cameras

ATS currently works for 125 municipalities in 19 US states and territories and a Canadian province with red-light running cameras and speed enforcement.

Staff has grown from Tuton and his brother 21 years ago, to 425 now.

The privately held company has been profitable every year since they started the
 business, he says, and they have funded the growth so far from their profits, never previously having sought outside investment.

Tuton says that investment by GS will allow the company to continue on a strong "growth trajectory."

"Cash-strapped cities are finding it more and more difficult to deploy adequate police resources to fight serious crime," Tuton says. "Our cameras handle the routine traffic enforcement duties so officers can spend more time in their communities. We help cities improve public safety by providing solutions that also generate needed revenue by shifting the financial burden from the taxpayers to the violators."

TOLLROADSnews 2008-09-28