De La Rue Cash Systems is to acquire the banking automation business of Portuguese self-service technology vendor Papelaco, in a deal worth up to EUR36.5 million.
Cash consideration is expected to be EUR26 million, comprising estimated net assets of EUR10.5 million and estimated goodwill of EUR15.5 million with a further payment of up to EUR10.5 million dependant on certain performance criteria being met, linked to sales and margin growth.
The transaction is expected to complete on 31 May 2002 with the transfer of operations taking place on that date, subject to regulatory approval.
The deal will add significant self-service technology to De La Rue’s existing range of teller automation and back-office cash processing systems.
Papelaco's banking automation business, based in Lisbon, produces automated teller machines, multifunction kiosks and other self service applications for the Portuguese and Spanish markets. Based on the unaudited management accounts for the 12 months ended 31 December 2001, business turnover was EUR35 million with an operating profit of EUR3.5 million.
Under the terms of the agreement, approximately 400 sales, service and administration staff based in Portugal and Spain will be integrated into De La Rue Cash Systems. The costs associated with integrating the Papelaco business, mainly concerning systems and processes integration, are not expected to exceed EUR1.5 million.
Pietro Armanini, managing director, Cash Systems, says: "We are increasingly seeing a strong trend for banks moving cash transactions activities away from the teller to a self service area...Papelaco's banking automation business provides a natural extension to Cash Systems' own offering."