Shares in Trintech soared yesterday upon news that the firm was selling off its original hardware payments business for $12.1 million (€9.5 million) in cash. The company will now concentrate on developing its position in funds reconciliation software.

The business being sold takes in both Trintech's point-of-sale products and its unattended payment product line. Both will be acquired by Verifone, a Californian company that specialises in this type of payments solutions.

Trintech had considerably less scale in the area and has thus struggled to make the payments business profitable. For the first quarter of this year, the firm as a whole reported a net loss of $2.1 million on revenues of $11.1 million.

Cyril McGuire, Trintech's chief executive, said the deal would allow the company to "aggressively expand" in reconciliation software. These products, which have been profitable for Trintech, are typically sold to the finance departments of large corporates, where risk management is a priority.

"The focus going forward is software," Mr McGuire said. He highlighted potential sales to the commercial, financial and healthcare markets in particular.

Yesterday's sale will leave Trintech with net cash balances of close to $50 million, with Mr McGuire signalling the Dublin-based firm's intention to use this for both acquisitions and organic expansion.

He said the company could pay up to $50 million in cash and shares "if the right deal comes along". Further information on this strategy is expected when Trintech issues results next week. Earlier this year, the company bought Assurity Technologies, a reconciliation software business, for $5 million.

Analysts welcomed the sale to Verifone, noting the impact it would have on cash balances at Trintech. They expect a re-rating of the firm's stock to reflect this.

This re-rating seemed to be taking root yesterday, with shares in the Nasdaq-listed company up by almost 8 per cent at $3.50 in early trade.

Under the terms of the sale, the $12.1 million price could be adjusted based on the working capital of the business and other "accruals" at the closing date.

The deal is expected to close by the end of the month, having already been approved by Trintech's board.