Seeking to gain a larger footprint in the growing business of high-speed tolling, 3M Co. said Thursday that it will buy Federal Signal Corp.'s toll collection division for $110 million.

The all-cash deal positions 3M to expand its existing traffic systems operation at a time when electronic tolling is expected to grow about 12 percent a year. Federal Signal Technologies Group focuses primarily on toll collection software, parking management and license-plate recognition software.

"Electronic tolling and parking are key adjacencies to 3M's offering for motor vehicle systems and services," John Houle, vice president and general manager of 3M's traffic safety division, said in a statement.

Shares of Federal Signal jumped after the announcement and closed at $5.63, a 19 percent gain. Shares of 3M closed at $86.73, a decline of less than 1 percent.

Road tolls have become more common because the federal gas tax doesn't provide enough money to maintain the nation's highways. And with urban congestion increasing, there is more demand for high-speed toll booths that allow drivers to pay with transponders without having to slow down.

Federal Signal's products "are really conducive to that," said Nicholas Heymann, an analyst at William Blair.

Houle said the Federal Signal unit will complement what 3M can offer state and federal transportation agencies, toll authorities and law enforcement agencies. 3M has sold traffic-related products for more than 70 years.

In December, 3M said it would spend $1 billion to $2 billion this year on acquisitions. During the past two years, it has announced or completed 18 acquisitions with an announced value of $2.36 billion, according to Bloomberg.

Mark Henneman, vice president of Mairs and Power Inc., which owns more than 2 million shares of 3M stock, said he was pleased with the recent deal.

"It's the blocking and tackling 3M does," he said. "They run their existing units really well and then add these complementary businesses."

Federal Signal, which had an outstanding debt of $235.6 million as of March 2012, said it would use the sale to pay down debt, according to Reuters.

The company employs about 500 people in Arizona, California, Illinois, Michigan, Missouri, North Carolina, Tennessee, Texas, Hong Kong, Dubai and the United Kingdom, 3M said.

Walker Moskop • 612-673-4265 David Shaffer • 612-673-7090