Norkom Technologies pays $36.5m for Digital Harbor
31 July 2007 | 7979 views | 0
Norkom Technologies, a Dublin-based provider of anti-fraud and compliance products, has acquired Digital Harbor, a US supplier of anti-money laundering software, for a total consideration of $36.5 million in cash.
The purchase price includes a deferred consideration of $3.5 million, payment of which depends on the achievement of certain performance criteria.
Norkom says the acquisition of Virginia-based Digital Harbor will add three new research and development centres - two in the US and one in India - to its operations.
The acquisition will also expand its client base to include tier one financial services institutions such as HSBC, Credit Agricole, Rabobank, Bank of Montreal, DTCC and Western Union. In addition, Digital Harbor's partnership agreements with IBM and eFunds Corporation will accelerate Norkom's growth in the financial crime and compliance marketplace.
"Market research tells us that 73% of leading financial organizations are adopting or plan to adopt an enterprise wide approach to financial crime and compliance management across global geographies, product sets and channels," says Norkom's CEO Paul Kerley. "Digital Harbor has particular expertise in user interface design and enterprise wide case management, which complements our own skills in enterprise wide detection, profiling, investigation and process automation."
Digital Harbor was founded in 1997 and now employs 74 staff. For the trailing twelve months ended 30 June 2007, the firm had un-audited revenues of $7.0 million, with an Ebitda loss for the same period of $3.2 million.
Norkom says it will fund the acquistion through a combination of existing cash resources and credit lines. The vendor says it expects the acquisition to be EPS enhancing on an adjusted basis (before amortisation and the cost of employee stock options) for the first time in the financial year ended 31 March 2009.
In another move, Norkom says it has also entered into arrangements with Goodbody Stockbrokers to raise a minimum of EUR10 million via a share placing.
The final terms of the placing will be determined in accordance with demand to be solicited by Goodbody Stockbrokers through a book-building process, says Norkom.