Integrity Holdings, the Dublin-based software and financial services company, is in advanced negotiations to acquire a British software company which will boost its sales and profits by more than 60 per cent.
Announcing strong third-quarter results, which showed a 411 per cent rise in pre-tax profit to $1,134,619 (€1,076,590), the group said an announcement on the acquisition would be made in the final quarter.
While not identifying the target company, Integrity said it was in a similar business.
The acquisition, if successfully concluded, would not dilute earnings per share, according to the group. On that basis, if the consideration is mainly in shares, the acquisition is likely to be valued at more than $30 million. The shareholders of the British company would end up as significant shareholders in the enlarged company.
Integrity has been active on the takeover front, acquiring Datasoft, Premier Computer and the business of the Internet solutions provider Net.Results recently. The latest results from Integrity show a 253 per cent rise in revenue to $9.19 million. The acquisitions, the group said, made only a "limited" contribution.
Total assets grew by 169 per cent to $7.96 million. It remains in a strong financial position with cash on hand of $751,557. Group financial director, Mr Paul Carroll, said the growth reflected the success of its acquisition strategies to date.
"We are continually increasing our corporate customer base and these significant IT relationships are allowing us to sell other group products and services along with the business to business aspect of the Internet to these customers. Our ambition is to continue to grow both through acquisition and organically, which will deliver significant returns to our shareholders."
The quarterly statement said all divisions had performed in line with expectations. Contracted sales continued to grow and represented 38 per cent of group sales. Software sales were ahead of expectations, mainly due to the final installations of Y2K upgrades to existing customers.
However, software sales for the final quarter will be lower due to the embargo on software installation in the run up to 2000 by a number of groups.
Nevertheless, the board is confident the strong performance will continue for the remainder of the year.
Integrity gained a share quotation on Nasdaq on the bulletin board in August 1998 but hopes to get a full listing in the small caps section by the end of the year. The management owns more than 55 per cent of Integrity. Institutions and other employees own the remainder.
