Provenco-Cadmus merger to cut costs by $20 million

Thursday 26th June 2008

The merger between eftpos terminal companies Provenco Group and Cadmus Technology will cut annual costs by NZ$20 million, almost three times as much as was forecast before the amalgamation, chairman Rick Christie said.

The companies had previously estimated synergy benefits from a merger of NZ$7.6 million, Christie said in a statement today.

The merged company, called ProvencoCadmus Ltd, will post an ebitda loss of about NZ$10 million for the 12 months ended June 30, reflecting one-time restructuring costs.

ProvencoCadmus said in May it would cut about 100 workers, or 25% of its staff to reduce costs and duplication between the two former rivals. The company plans to raise capital in the first quarter of 2009 and is also considering the sale of some non-core assets, it said.

Shares of ProvencoCadmus rose 4% to 26 New Zealand cents. They traded at NZ1.15 at the beginning of 2007.

By Jonathan Underhill

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