Toronto-based Quarterhill has agreed to acquire Conduent’s tolling business in a transaction the company says will nearly triple its tolling revenue and create one of the industry’s largest providers of intelligent transportation systems.

The deal includes $70 million in cash, subject to adjustments, plus Quarterhill shares representing 7% of the company’s outstanding stock. Quarterhill said it expects to finance the cash portion through debt. The transaction is expected to close in the fourth quarter, pending regulatory approvals and other customary conditions.

Quarterhill said the acquisition will create a combined tolling platform with about $2 billion in backlog, providing long-term revenue visibility. On a pro forma basis, the combined business would generate more than $400 million in annual revenue.

“This is a transformational transaction for Quarterhill, and one the Board enthusiastically supports,” said Rusty Lewis, chairman of Quarterhill’s board of directors. “Conduent’s tolling solutions business brings scale, long-term agency relationships, proven technology capabilities and deep tolling expertise in a core market.”

Conduent’s tolling business provides electronic toll collection, open-road and all-electronic tolling systems, automated license plate recognition, vehicle detection and classification, payment processing, customer service, invoicing and back-office operations for transportation agencies primarily in the U.S. and the U.K.

Quarterhill CEO Chuck Myers said the acquisition advances the company’s strategy of building a larger and more profitable intelligent transportation systems platform.

“With greater scale, enhanced backlog visibility and meaningful adjusted EBITDA contribution after anticipated day-one synergies, we believe Quarterhill will have a stronger foundation for long-term growth,” Myers said.

While the acquisition is focused on tolling, Quarterhill also has a significant presence in the commercial vehicle sector through its intelligent transportation businesses, which provide weigh station screening, commercial vehicle inspection technologies and traffic management systems used by transportation agencies across North America.