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Alphyra sells business unit for EUR12m
Wednesday, December 19 2001
by Matthew Clark
After reporting losses of over EUR4 million, Irish electronic transactions group
Alphyra said on Wednesday it would sell its voice and data business for EUR12
million.
The company, formerly known as ITG Group, said it had entered into a conditional
agreement to sell its voice and data business, which currently employs 160, for a
total consideration of EUR12 million. According to Alphyra, the deal will see the
firm receive an initial cash consideration of EUR8 million, payable on completion
of the sale with the balance being satisfied by the issue of EUR4 million in loan
notes. Alphyra's payphone business will not be part of the sale.
The company will sell its voice and data business to Calyx Computers Limited,
owned by Maurice Healy, a director and co-founder of Alphyra. The completion of
the deal is dependent on shareholder approval, in part due to the value of the
agreement, but also because of Healy's role in the Alphyra.
It is thought that if the merger is approved Healy would leave the Alphyra group
board to run the voice and data business.
A spokesperson for Alphyra explained that that company was selling the business
as part of its restructuring plan announced earlier in the year. The business
said it would now be able to focus on its core operations, the electronic
transaction market, which is estimated to be worth EUR10.7 billion across Europe,
generating total payments of EUR665.4 billion. Already the company operates
electronic mobile phone top-up services and electronic card payment services in
Ireland, the UK, France, Sweden and Germany.
Along with the announcement, the company released its results for the six-month
period ending 31 October. Alphyra reported a loss per diluted share of EUR0.226
in the six-month period, compared to profit per share of EUR0.302 for the same
time a year earlier.
The business said loss before interest, tax, depreciation and amortisation
(EBITDA) was EUR0.1 million compared to a profit of EUR2.2 million in the same
period in 2000. According to Alphyra, these losses came about primarily as a
result of heavy investment in the two new markets of France and Germany. Loss
before tax, goodwill and exceptional items was EUR4.2 million, compared to the
EUR0.2 million figure that the company reported last year.
The firm's Electronic Transaction Group lost EUR4.3 million in the six month
period, while the voice and data business made a small profit of EUR0.1 million
during that time. The company also said that the Electronic Transactions Group
reported a negative EBITDA of EUR1.8 million over all markets, but in the Irish
market Alphyra reported positive EBITDA of EUR2.1 million, compared to a loss of
EUR0.5 million last year. The UK market reached EBITDA breakeven, the company
said.
The sale of the company's voice and data unit follows the firm's decision in
August to announce a placing and open offer that was expected to see it issue
eight million new shares and raise EUR36.2 million. The new shares were to 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.
Additionally, in October, Alyphyra purchased the transaction services division of
De La Rue for STG6 million. That deal saw Alphyra pay STG3 million in cash and
STG3 million in stock for the British business, which facilitates pre-payments
for goods and services including utility bills and the top-up of mobile phone
credits. At the time Alphyra said the acquisition was in line with its strategy
to consolidate its position in the UK market.
Worldwide Alphyra employs around 600, with 40 percent of its workforce located in
Ireland. The company is on-line at HREF="http://www.alphyra.com">http://www.alyphra.com
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