13 Dec 2012

Smartpay to acquire Viaduct eftpos business

8:33 am on 13 December 2012

Payment terminal services company Smartpay is intending to buy a Wellington-based eftpos terminal business for $16.3 million.

The firm plans to acquire Viaduct from founders Mark Unwin and Marty Pomeroy through a mixture of cash, debt and Smartpay shares, subject to shareholder approval.

Smartpay said the purchase will add about $6 million in revenue and $3 million on gross earnings on an annualised basis.

Part of the purchase price comes from a $3.7 million capital raising to institutional and experienced investors by issuing shares at 15 cents a piece.

Smartpay managing director Bradley Gerdis said that was a vote of confidence in Smartpay's plans, and he expects its existing shareholders to support the deal.

He said Viaduct adds more customers and allows it to sell them higher value services such as loyalty programmes.

Mr Gerdis said Viaduct will provide an ability to accept foreign cards and it will offer other content over the devices.

Mr Gerdis said the company's its decision to raise money means it will have to delay its listing in Australia until the second quarter of next year because of stock.

Both Viaduct founders will join Smartpay as senior executives and will be entitled to long term incentive bonuses of two million options to buy shares at 20 cents from the end of 2015, and another two million at 30 cents from the end of 2017.

Smartpay's shares fell 0.5% to 17 cents each on Wednesday, and have risen by more than half since the beginning of the year.