KEY POINTS:
Eftpos companies Cadmus Technology and Provenco have agreed to merge.
The proposed merger will result in the companies amalgamating and continuing as an NZX-listed company under a name still to be finalised. Both boards recommend the proposal.
Cadmus is 19.9 per cent owned by Navman founder Peter Maire. Its shareholders will receive one share in the new entity (MergeCo) for every 4.6 Cadmus shares held.
Provenco shareholders will hold one MergeCo share for every Provenco share held.
The capital notes issued by Cadmus and Provenco will continue on the same terms and conditions, subject to trustee consent.
Cadmus shares closed on Friday on 17.3 cents, valuing the company at $50 million, while Provenco's shares closed on 63 cents, valuing it at $88m.
Both companies' share prices have risen strongly in the last month Cadmus up 30 per cent and Provenco's 19 per cent.
The proposed merger is to be effected by an amalgamation under the Companies Act 1993.
The companies said each had committed to investing significant sums internationally into what would have been overlapping technology and were seeking to expand into markets that also overlapped.
The combined businesses will have a strong presence in New Zealand, Australia, Singapore, Malaysia and in mainland China, and a growing presence in other regions.
Cadmus has also expanded its rental division and the combined group will continue to build on this industry segment by offering rental proposals to a broader international customer base.
Provenco acting chairman Rick Christie said Provenco had significantly expanded its international businesses, Vantex and Provenco Retail Automation to position them for growth. Vantex had a strong distribution system.
He said there was a big opportunity to leverage off the experience of Mr Maire through his successes with Navman.
Mr Maire said the move was a strategic merger that would meet the goal of rapidly building scale.
He said since he became chairman of Cadmus in May he had revamped its management and the company was achieving good organic growth.
"We are now in a position to accelerate this growth internationally, with Provenco being both a logical and valued partner in achieving this."
It is proposed a new Board for MergeCo will be established on completion of the merger, and will include representatives of Cadmus and Provenco.
The companies have signed a Merger Implementation Agreement and shareholders of each company will vote on the proposal in December.
- NZPA
