The shares closed up 162p at 912p, valuing the company at pounds 1.06bn, after Trafficmaster said it would sell more than 9.6 million new shares at 700p each in a placing and open offer.
The money raised will be used to set up networks of sensors to detect traffic movement in France, Italy and the Netherlands. Trafficmaster also plans to launch mobile Internet services in the UK next year in partnership with France's Webraska Mobile Technologies.
David Martell, Trafficmaster's chief executive, said: "The telematics market place is hotting up and people realise it's going to be big business." But he admitted that he had been "surprised" by the level of positive reaction to his strategic plans.
Julian Morse, an analyst at Beeson Gregory, said: "It [Trafficmaster] has gone further than the market thought, which is good news.... It was thought it would announce details of expansion in France, but with Italy and the Netherlands, this should give them critical mass."
Mr Martell plans to spend about pounds 35m on setting up networks in Europe which gather and disseminate traffic information. Trafficmaster's investment in telematics, which enables drivers to call emergency and breakdown services at the push of a button, and in vehicle management and tracking, is expected to total about pounds 9m.
A further pounds 6m will be spent on introducing Trackstar, the stolen-vehicle tracking service which Trafficmaster set up in partnership with Lex Service's RAC roadside breakdown unit, in at least four more countries by the end of 2000. A service for the fleet vehicle market is expected to cost pounds 3m and Trafficmaster is also spending pounds 1m on a pilot operation in the US.
Under the joint venture with Webraska Mobile Technologies, real-time maps will be displayed on mobile phones using technology and software developed by Webraska. Trafficmaster will provide traffic and journey time information from its network of sensors across Britain.
Trafficmaster is the only company licensed to operate a sensor network in the UK. It provides traffic flow information both directly and through partnerships with companies such as the AA, RAC, Vauxhall and BMW. In March, Trafficmaster formed a partnership with Mannesmann to develop and market traffic information in Germany.
Trafficmaster's shares have risen eightfold since January, making the stock the second best performer on the FTSE 350.Reuse content