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ITG has announced the details of a placing and open offer that will see it issue eight million new shares and raise an expected EUR36.2 million.
The new shares will be sold for EUR5 per share, which values the company at approximately EUR158 million. According to the company, the revenue from the open offer will be used on new investments and company acquisitions.
The company, which will officially change its name next month to Alphyra, operates two distinct business groups, an electronic transactions division and a voice and data unit. The electronic transaction division's primary activities include the supply of ITG-owned payment terminals for credit card transactions as well as top-up services for pre-paid mobile phone companies, including Eircell and Digifone. Its voice and data unit, which is cash positive, is involved in the payphone industry, computer training and carrier services.
ITG sent a letter to the shareholders on Monday, in which they were given the opportunity to buy new shares to ensure that their proportion of ownership remained the same.
Marketing manager Brian Williams said he was "absolutely very optimistic" about the shares offer. He added, "Even if the world went crazy tomorrow, we will still have this money. The offer is underwritten by two important stockbrokers." Goodbody Corporate Finance in Ireland and Insinger Townsley in the UK are underwriting the offer.
Williams said that his optimism has grown significantly over the last few weeks, because of "positive signals" from the market. "Two weeks ago we thought we would raise 25 million to 30 million euros with the shares offer," he added. "But now we're talking about EUR36 million."
Distributing top-up cards is a costly business (a third of the sales price), so an electronic system is attractive to mobile telecom operators and relieves the shopkeepers of a theft problem, according to the company.
The proceeds of the shares offer will be used to extend the payment terminal network across a number of key European markets. France and Germany are the first priorities, but other European countries should follow, according to ITG.
The company anticipates securing more than 23,900 new payment terminals at an estimated cost of EUR1,088 per payment terminal. This amounts to a total cost of roughly EUR26 million.
ITG plans to use the rest of the money (approximately EUR10 million) for the acquisition of a small company operating in the electronic transactions sector in Europe. The terms of the acquisition have not yet been finalised and the company was unwilling to divulge further details.
ITG already owns and maintains 10,000 payment terminals in Ireland and 30,000 in the UK and the company said it had no major investment plans in Ireland. "We concentrate on consolidating our position in Ireland," Williams said. "But we are planning to add new user options to the existing payment terminals in Ireland."
ITG now owns 40 percent of credit card terminals in Ireland and processes three quarters of Ireland's mobile phone top-up transactions.
The company employs 600 worldwide and has offices across Europe. In London at 4:20pm GMT on Monday, ITG was down 0.51 percent at STG3.2912.
The company can be found at http://www.itg.ie.
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