ACT Group Plc has not looked back since it sold its personal computer business to Mitsubishi Electric Corp for a handsome UKP39m, and yesterday it announced the big one – it is paying Nynex Corp UKP93.5m for BIS Group Ltd, the former Business Intelligence Services Ltd, in a deal that will turn ACT into a […]
ACT Group Plc has not looked back since it sold its personal computer business to Mitsubishi Electric Corp for a handsome UKP39m, and yesterday it announced the big one – it is paying Nynex Corp UKP93.5m for BIS Group Ltd, the former Business Intelligence Services Ltd, in a deal that will turn ACT into a UKP258m-a-year company – making it about 20% bigger than Logica Plc. Nynex, the New York and New England Baby Bell agreed to buy BIS, best-known for its Midas banking software, in 1986 for shares worth UKP75m – so it comes out with a small profit on the deal; at the time, the London financial software and management information services company had planned to float on the London Stock Exchange, but the owners decided to sell out to Nynex instead (CI No 530). BIS was then forecasting UKP6m pre-tax on turnover of UKP60m; last year, profits were UKP7.6m on sales of UKP105.4m, so it has not languished under Nynex’s stewardship. An attraction of BIS is its global reach – it operates in the UK, the US, continental Europe and the Far East. BIS provides ACT with a unique opportunity to become a leading provider of financial products worldwide and for it to build a significant presence in software services in the UK, declared a delighted Roger Foster, founder and chairman of ACT. The prospects for ACT and BIS in the medium term are excellent. Part of the cash is to be raised by means of a four for 13 rights issue of up to 43.4m new ordinary shares at 123 pence per share, against the 155 pence at which they closed on Monday night – they were off sevenpence at 148p in early trading yesterday, depressed by the rights issue. The rights will UKP50.9m net of expenses, and the balance will be met in cash from ACT’s own resources. Payment of UKP25m of the total will be deferred, and paid in cash in two equal tranches, six and 12 months after completion. BIS comprises three operating units – banking systems, information systems and Brann direct marketing, and ACT indicates that it may sell some parts of the business. Nynex says it had been looking for a buyer for BIS since it reviewed its businesses and decided to concentrate all its resources on telecommunications related activities. The company is also looking for a buyer for BIS Strategic Decisions, which is not part of ACT’s acquisition: the unit offers marketing consultancy to vendors and service providers in the electronics and information technology industries.