SmartPay’s ProvencoCadmus transaction accepted

Merchant services provider SmartPay has bought the payments division of eftpos company ProvencoCadmus after it fell into receivership earlier this month.

The purchase includes all of ProvencoCadmus’ New Zealand and Australian payments operations, transactional business and all intellectual property relating to payments.

Unsustainable debt, lack of investment capital and a weaker than expected trading performance in its retail automation business saw ProvencoCadmus go into receivership on August 4.

With similar products and some shared history, SmartPay has now swept up the company’s assets and SmartPay managing director Ian Bailey said the deal would see the company service more than 25,000 terminals already in the market.

He said the combined customer bases will provide ongoing efficiencies, business
opportunities and revenue both in New Zealand and internationally.

“It will also increase SmartPay's product offering that includes VoIP, broadband,
Eftpos terminals and secure Eftpos internet connectivity through to audio and
video, music, messaging as well as managing one of the largest wi-fi networks
in New Zealand.”

SmartPay has been building its business up through other acquisitions recently,
including All Talk Communications, Merchant IP Services, and wi-fi provider Fivo.

Earlier this year SmartPay raised $490,000 in a share placement to private investors, with some of the cash earmarked for acquisitions.

But it also posted a $3.4 million loss in June, following on from a $2.5 million loss the year before.

Receivers have been trying to sell ProvencoCadmus' businesses as going concerns and Mr Bailey already has a long connection with the company, founding Cadmus Technologies and serving as managing director before the company merged with Provenco in 2007, after which he left to head up SmartPay.

Last November SmartPay also signed a distribution agreement with ProvencoCadmus to distribute SmartPay's IP-POS service.

Mr Bailey said the shared history, common links and synergy between both businesses was “very strong”.

“Many of the staff who assisted in establishing Cadmus are now employed by Smartpay so we understand the ProvencoCadmus payments business very well. Initially we will keep the ProvencoCadmus business separated from the current SmartPay business so both entities remain focused on their business plans and strategies.

“In terms of ProvencoCadmus payments we will return to the Cadmus successful growth strategy in place prior to the merger and focus on developing and growing the customer base."

The purchase will see SmartPay take on about 60 staff from the defunct eftpos company and it will move into the existing business offices of ProvencoCadmus as the current SmartPay offices are too small to fit the new needs of the business.