Cadmus looking to mergers to gain critical mass

Peter Maire (left) talks to shareholders with Keith Phillips at the AGM yesterday. Picture / Greg Bowker

Technology entrepreneur Peter Maire, who heads up mergers and acquisitions at eftpos terminal supplier Cadmus, says merger talks with rival Provenco will take place within months.

"I'm sure we'll talk sometime in the New Year," Maire said. "We've got to get this Intellect deal done first and then I think it would definitely make sense to talk."

Speaking yesterday after Cadmus' annual meeting, Maire said a merger right now with Provenco, of which he is also a shareholder, did not make a lot of sense.

"If we're then talking something different - which is Cadmus and Intellect together and Provenco - I think the Provenco directors probably would be interested to talk," he said.

The proposed purchase of ASX-listed Intellect Holdings' European and South American operations would give Cadmus a presence in the unattended payment technology sector, as used in petrol stations, and a footprint in Belgium - two areas of interest to Provenco, Maire said.

Chairman Keith Phillips told the meeting the world was moving at an incredible pace "and we need to basically crack both size and time ... by doing more than just organic growth".

However, Phillips attempted to dampen speculation about the possibility of merger discussions.

"If something like that were to happen we will inform our shareholders but nothing like that is happening as we speak today," Phillips said.

Managing director Ian Bailey said the deal announced earlier this month to buy Intellect's primary subsidiary - Intellect International - would gain Cadmus critical mass.

"This by no means does it but it heads towards the right direction."

Buying Intellect, which makes about 125,000 terminals a year compared with Cadmus' 25,000, could also push the company into the top 10 global suppliers, he said. Shareholder approval for the deal, under which Intellect Holdings would receive 175 million shares, equivalent to about a 39 per cent stake in Cadmus, was expected to be sought in December.

Meanwhile, Cadmus was reluctant to give precise financial forecasts due to the lumpy nature of the business, Bailey said after the meeting.

"However, saying that if you look at Intellect sales last year they were about a $35 million company, we turned over $25 [million] so that gives you some sort of indication of what we would hope to end up [with]."

Shares in Cadmus were unchanged at 22c.