Swedish traffic safety solutions supplier Sensys Traffic has entered into an agreement to buy a Dutch company Gatso Beheer (Gatso) for approximately SKr278m ($33m).

Gatso is a supplier of traffic enforcement systems and associated services with service provider operations in the North American market.

The product portfolio of Gatso includes traffic enforcement systems and software that allow customers to administer traffic violations.

The merger of operations of both the companies will create the largest supplier of traffic enforcement equipment with a strong value proposition in the managed services market.

"Sensys and Gatso will be significantly stronger together than as individual companies."

Sensys Traffic CEO Torbjörn Sandberg said: "Sensys and Gatso complement each other very well and still share the fundamental values and ethics that are needed to build sustainable business growth in the enforcement market.

"Sensys and Gatso will be significantly stronger together than as individual companies. The Sensys Gatso Group comes out of the merger in the pole position in the equipment market being the market leader and as a challenger with solid foothold in the managed services market.

"We expect synergies in sales where our combined sales force will be able achieve better market coverage while we also get a broader product portfolio to bring to our joint customer base.

"On top of the strong market position, synergies in R&D will provide a great focus on core technologies, software, as well as on customised solutions allowing the company to expand into new markets."

The combined entity, which would operate under the name Sensys Gatso Group, will have strong presence in Europe, the Middle East, Asia and Australia, as well as have a foothold in the North American managed services market.

The acquisition combines the customer base and capabilities of both the companies, which will reduce volatility of the project oriented equipment markets.

A total of 15,000 systems of Gatso are installed across the world, making it the largest traffic enforcement supplier in the UK, the Netherlands and Belgium, and has strong market shares in France and Switzerland.