Seeing Machines Limited (LON:SEE) is moving its relationship with Progress Rail into the commercial phase after it extended its partnership agreement with the world’s largest builder of diesel-electric locomotives.
Progress – which is owned by Caterpillar Inc (NYSE:CAT) – and Seeing have already been working together for a number of years to develop the latter’s driver monitoring technology for the rail industry.
Through “extensive trials” the two have built a system that keeps an eye on the train driver and identifies signs of fatigue, which is estimated to be a key factor in around one-fifth of all rail incidents.
Progress given worldwide licence rights for the technology
Today’s agreement gives Progress the exclusive worldwide licence rights to that technology for core rail applications.
It will pay Seeing royalties on all sales and there will also be minimum royalty revenue growth commitments.
“We are delighted to be moving our partnership with global leaders Progress Rail into the commercial phase now,” said Seeing Machines senior vice president Paul Angelatos.
“Having worked closely over the past few years to understand and develop a robust solution for the rail industry through trials, it's very pleasing that both parties share the same vision and see large market opportunity to enter the commercial ramp phase, which will deliver significant benefits in safety and productivity across the rail sector."
READ: Seeing Machines expands its reach through collaboration with vehicle safety specialist Autoliv
“Several recent high-profile rail industry accidents have proven the need for fatigue and distraction avoidance solution in cabs,” said finnCap analyst Lorne Daniel in a note this morning.
“In September, a NY commuter train failed to brake at Hoboken Terminus, killing one person and injuring 114, and it was later discovered the driver suffered from undiagnosed severe sleep apnoea
“This is a clearly a major problem for rail operators, and Progress Rail will offer Seeing Machines technology as part of their driver-monitoring package.”
Daniel added: “With a practical solution for this market now at hand, this new and extended partnership represents a move to a much-needed commercial deployment phase across the rail industry.”
In late afternoon trading, Seeing Machines shares held steady at 3.12p.
'House' broker finnCap repeated its share price target of 12p on the stock in a note to clients today.
-- Adds share price, broker target --