Maire bid for Cadmus assets

Photo / Kenny Rodger

Several bidders threw their hats in the ring for the business of troubled eftpos company ProvencoCadmus including a group led by existing shareholder Peter Maire, the Business Herald understands.

But yesterday rival eftpos provider SmartPay announced it had purchased the Australian and New Zealand payments operations of ProvencoCadmus for an undisclosed sum.

ProvencoCadmus was placed in receivership on August 3 owing $45 million to its bankers and capital note holders.

SmartPay says the ProvencoCadmus purchase gives it an additional 20,000 eftpos terminal customers, bringing its customer base to over 25,000. The deal includes the intellectual property, manufacturing operation, transactional processing engine and service and support facilities of the payments divisions.

It leaves behind ProvencoCadmus' international business in petrol station forecourt and site management systems and other retail technology solutions. SmartPay managing director Ian Bailey said it was "not a business we know".

Michael Stiassny of KordaMentha said the receivers had been in discussions with a number of parties.

He said the receivers hoped to conclude a sale of the rest of the business shortly. He declined to comment on whether they had been talking to Navman founder Peter Maire. Maire also said that he could not comment.

ProvencoCadmus asked its bank ANZ to call in the receivers when large shareholders such as Maire's Tahia Investments and Todd Capital declined to prop up the company with more working capital.

It has been speculated that Maire and Todd Capital were unable to agree on what shape a capital raising should take. Maire led the merger of Cadmus Technology and part-rival Provenco in 2007 and 2008.

Stiassny said the Australasian payments divisions were by far the major parts of the business. However Bailey, who founded the Cadmus eftpos business in the late 1990s and left just before the merger, said SmartPay would take on only around 50 to 60 of ProvencoCadmus' 180 staff.

Stiassny said the receivers had done their best to sell the businesses as a going concern and were "surprised and disappointed" that some reorganisation had not taken place before the receivership.

"Regardless of the outcome there was probably always going to be further redundancies as we got into the business and understood how it worked."

Bailey said it was an "opportunistic acquisition" and SmartPay was able to move quickly. He said the requirement for ongoing security updates meant there was a good replacement business in eftpos, and as most machines were rented there was an ongoing revenue stream that continued to grow.

SmartPay, which provides wireless payment solutions to retailers, was also doing a lot of work in the telecommunications sector and saw substantial growth there. SmartPay would move into ProvencoCadmus' premises in Wairau Rd as its own offices had become too small.