KEY POINTS:
Eftpos companies Provenco and Cadmus will seek to raise $15 million from shareholders in a rights issue after its proposed merger.
The two companies announced yesterday that the merger would become effective next month - subject to 75 per cent shareholder approval at two separate meetings on April
23.
Provenco chairman Rick Christie, who will chair the proposed merged board, said the merger prospectus and associated documents have now been filed with regulatory authorities.
The initial name of the merged company will be Provenco Group, but will be changed to an as-yet undetermined name.
Christie said banking arrangements for the merged company have been finalised with the ANZ National Bank, including an anticipated capital raising of around $15 million to reduce debt and fund future expansion.
"This proposed merger is unanimously supported by the boards of both companies and will bring benefits of increased scale and reach, and substantial synergy savings."
He said the combined cost savings have been estimated at $7.6 million per annum, but the board was confident this would increase over time.
"Additionally, we see the combined group being able to present a much stronger position in the international markets and be able to access a wider range of new technology and product applications."
The independent expert commissioned to report on the merger, Grant Samuel, has confirmed that the merger ratio of 4.2 Cadmus shares for each Provenco share to be fair to shareholders of both companies. Christie said Grant Samuel's report indicated that both company's shareholders were "likely to be better off if the merger is implemented, than if it is not".
Provenco and Cadmus posted revenue last year of $170.9 million and $25.4 million respectively but net losses of $5.2 million and $4.5 million.
LINK-UP
* Provenco and Cadmus agreed to merge last October.
* The merger was cleared by the Commerce Commission on February 7, having been satisfied that it would not substantially lessen competition.
* A merger looks set to take effect next month - subject to 75 per cent shareholder approval.
* The special shareholder meetings will be held at the Ellerslie Convention Centre in Auckland on April 23 at 10.30am for Cadmus shareholders, and 1.30pm for Provenco shareholders.
* Shareholders should receive the prospectus and accompanying documents next week.