GFG buys back intellectual property

By ADAM GIFFORD

An Auckland company which developed and maintained the industry-leading UniCard banking software for IT giant Unisys has bought back the intellectual property rights.

GFG Group chairman Ralph Green said although the purchase price was confidential, the deal gave GFG a global software business.

"We are expecting a 30 per cent-plus increase in income this year. This business will be worth about $10 million in revenue this year, including licence revenue we did not get previously," he said.

The forerunner to UniCard was built by GFG back in 1989 as an in-house Visa card system for ASB Bank.

Unisys turned it into a product and sold it to banks around the world, paying some royalties to ASB. It is now used by more than 100 banks, many through bureau relationships.

Because GFG was working as a subcontractor, it did not hold the rights to its creation, but it continued to get revenue from services.

Green said Unisys' evolution from hardware to a more services orientation meant it was open to GFG's proposal.

GFG sought the intellectual property because it could see huge potential in UniCard as non-traditional payment businesses such as mobile phone companies and retail chains expand into financial services.

It had been reinvesting 70 per cent of its profits in development, but there was only so much it was prepared to do with a product it didn't own.

Green said GFG Group was raising about $3 million in new capital for product development and expansion.

"Traditionally the company has only gone into markets or built additional features when it could afford it," he said.

It got $75,000 in matching funds from Enterprise New Zealand to help it build up its sales and marketing capability in preparation for the shift, and it hired former Wang New Zealand head Ant Howard as managing director.

The company employs 42 people, including eight in Australia and four in the Philippines.