ITG to buy Dutch firm for €4.38m

Telecoms and computer group ITG has agreed to acquire Dutch firm Getronics Transaction and Card Systems for €4.38 million (£3.45 million) and may now look to move into the US and a listing on the Nasdaq.

Speaking at the company's a.g.m. yesterday, Mr John Nagle, chief executive of ITG, said the deal to acquire Getronics would be used as a bridgehead into the European card services market.

He said the group was targeting countries without significant language barriers such as Norway, Sweden and Denmark for expansion. He later told shareholders the next logical step was the US and a possible listing on the Nasdaq. "Listing on the Nasdaq is on ITG's radar screen and is in our sights but it must be done on the back of a good US acquisition," he told shareholders.

He said ITG could leverage the experience of its recently appointed chairman, US businessman Mr John J McDonnell, in this area. However, Mr Nagle did not rule out taking a secondary listing on a European stock exchange.

The acquisition of Getronics will be ITG's first in continental Europe and is scheduled to be completed at the end of September. The company employs 110 people in Amsterdam and had a book value on net assets of €49,932 (£39,325) on June 30th, 2000. Profit before tax was €472,084 (£371,796) to December 31st, 1999.

The Dutch firm provides electronic payment infrastructure to retailers in the Netherlands. It would give ITG a base to maintain some 47,000 payment terminals owned by Dutch merchants.

Mr Nagle said the company would try to persuade merchants to rent terminals from ITG instead of owning them. This would enable the company to provide additional services such as pre-paid cellular top-up on the machines to improve profit margins, he added.

ITG currently owns 6,300 terminals in the Republic which enable Esat Digifone customers to top up their pre-paid mobile phones. It hopes to own 27,000 in the UK by next summer. A recent report by Merrion Stockbrokers highlighted a delay in ITG's UK card strategy because British mobile phone operators had decided to group together in the pre-paid top-up market. But Mr Nagle said ITG was close to announcing a top-up deal with UK cellular operator Vodaphone and hoped to be alongside them shortly.

Mr Nagle said the group would explore ways of extracting value from the voice and data divisions of the company as the card services division expanded.

He said the group would soon exercise its right to acquire a further 10 per cent stake in British company Cardsave. This would bring ITG's stake up to 30 per cent.

One shareholder at the a.g.m. expressed concern that the stock was being treated like an "Internet stock" by the markets. The share price slumped to a low of €9 earlier this month following a record high of €22.10 in February. The stock closed up 35 cents at €9.60 yesterday.