Electronic payments firm Alphyra and ATM operator Cardpoint have said they expect to realise annual cost savings of €6.5 million within two years after their merger next month.
The enlarged group, renamed Payzone, is being prepared for an initial public offering of 31 per cent of its stock on the Alternative Investment Market (AIM) in London in early December.
Valuations will not be determined until the flotation but venture capital group Balderton is likely to realise as much as €120 million from the sale of shares in the flotation and Alphyra managers are likely to realise €30-€35 million.
Financial results filed yesterday in advance of the listing show that Alphyra's pretax loss grew to €12.6 million from €10.86 million in the nine months to September after a €13.23 million interest bill. Revenues rose to €2.78 billion from €2.73 billion.
Alphyra's earnings before interest tax depreciation and amortisation (EBITDA) grew to €24 million from €18.8 million before goodwill amortisation, share-based payments, exceptionals and group share of associated undertakings.
Cardpoint's pretax loss in the year to September increased to £31.84 million (€45.85 million) from £25.56 million after it took a £33.87 million charge for goodwill impairment. Revenues rose to £87 million from £84.1 million. EBITDA rose to £21.7 million from £19.8 million, before goodwill amortisation, exceptionals and share-based payments.
Alphyra chief executive John Nagle, who will be chief of Payzone, said the two firms had a combined EBITDA for the 12 months to September of €69.2 million. Assuming Payzone manages to maintain that historic run rate and achieves the synergies it is targeting, the business could generate annual EBITDA of about €75 million within two years.
Some 53 per cent of Cardpoint's shareholders have voted for the merger, which will be put to an egm on November 12th. Support from 75 per cent is required to sanction the deal, which is effectively a reverse takeover of Cardpoint, with Alphyra owning 59.05 per cent of Payzone. No cash will change hands. Payzone shares will be swapped for existing stock in Alphyra and Cardpoint.
Balderton is selling half its 67 per cent stake in Alphyra and Alphyra managers are selling half their 32 per cent stake, including Mr Nagle's 18 per cent stake.
