GlobalData Regulatory News (DATA)

8 Feb 2007 13:51

Datacash Group PLC08 February 2007 DataCash Group plc ("DataCash" or the "Company") Proposed Acquisition of NetGiro Systems AB ("NetGiro") Introduction DataCash Group plc, the AIM - listed payment service provider, today announcesthe proposed acquisition of the entire issued share capital of NetGiro SystemsAB ("NetGiro") for €10.25m (approximately £6.75 million) in cash which includesthe cash on the balance sheet at completion. At 31 December 2006 this wasapproximately €3.5 million (£2.31 million). The consideration will be satisfiedfrom DataCash's existing cash resources. The acquisition is conditional, inter alia, upon approval by the shareholders ofNetGiro International AB, the holding company of NetGiro. Background to the acquisition. NetGiro, based in Stockholm, Sweden, is a payment service provider targeting thecardholder not present e-commerce market and has a range of internationalcustomers which will broaden the sectors in which the Company operates. NetGiro has integrated to a range of European payment networks which combine toprovide NetGiro's clients with the ability to take payment from consumers intheir preferred local payment method. DataCash's stated vision is to provide a global payment processing and riskmanagement solution for internet merchants. The acquisition of NetGiro willextend the international reach of DataCash's product offering by providingclients with access to local European payment instruments such as Dankort, CarteBleue, International Direct Debits, Bank Wire Transfers and Giropay. For the year ended 31 December 2006, NetGiro earned unaudited profits before taxof approximately SEK 8 million (£0.58m) and had unaudited net assets of SEK41million (£2.96m). These numbers have been extracted from the management accountsof Netgiro International AB. Terms of the acquisition Under the terms of a share purchase agreement ("SPA") entered into today betweenDataCash and NetGiro International AB (the "Seller"), DataCash has conditionallyagreed to acquire the entire issued share capital of NetGiro from the Seller for€10.25 million (£6.75 million) in cash, which includes the cash on the balancesheet at completion. At 31 December 2006 this was approximately €3.5 million(£2.31 million). The consideration will be satisfied from DataCash's existingcash resources. Completion of the SPA is conditional upon the satisfaction of certainconditions, including the passing of resolutions by a two thirds majority of theSeller's shareholders at an extraordinary general meeting, which has beenconvened for 26 February 2007 to vote in favour of (i) amending the articles ofassociation of the Seller; and (ii) the acquisition. Under Swedish law, the SPAwill only be deemed binding on the Seller (although will be deemed binding onDataCash from the time of signing) once the amended articles permitting theacquisition of NetGiro have been registered at the Swedish CompaniesRegistration Office. Accordingly, completion of the SPA is also stated to beconditional on the amended articles having been duly registered. It is thereforeanticipated that closing will have taken place by 31 March 2007. The acquisition is expected to be earnings enhancing for the year ended 31December 2008 onwards as it is the Company's intention to accelerate theintegration of NetGiro's payment network during 2007. In the year to 31stDecember 2007, the acquisition is expected to be earnings neutral*. Ashley Head is Executive Chairman of DataCash and a significant shareholder inthe Company. Mr Head is also a Director of NetGiro and a Non-Executive Directorof NetGiro International AB, the parent company of NetGiro where he is the boardrepresentative of a significant shareholder. As a result Mr Head has notparticipated in the decision by the Board of DataCash to approve the transactionand transaction related matters. David Bailey, Deputy Chairman, commented "Our stated vision is to provide aglobal risk and payment processing solution for internet merchants, and thisacquisition is another step towards this, broadening our international offeringand providing access to other European payment types." Enquiries For further information contact: DataCash Group plcDavid Bailey - Deputy Chairman 0870 7274760 Keith Butcher - Commercial Director 0870 7274760 Paul Burton - Chief Financial Officer 0870 7274760 MJ2 Business CommunicationsAlice Proctor / Tim McCall (0)20 7491 7776 / 07958 167 119 The exchange rates used throughout this announcement are:Euro to British Pound (GBP): 1.518, andSwedish Krona (SEK) to British Pound (GBP): 13.856 \* This statement should not be taken to mean that the earnings per share ofDataCash will necessarily match or exceed the historical reported earnings pershare of DataCash and no forecast is intended or implied. This information is provided by RNS The company news service from the London Stock Exchange