ID Data Group Plc, the smart card solutions and outsourcing business,
announces that it has agreed to acquire the business and assets of
CredEcard plc (“CredEcard”), the pre paid card service provider, for a
total consideration of up to GBP725,000 in cash and shares subject to
achieving specified performance objectives over the next two years.
Commenting on the acquisition, Peter Cox, CEO of ID Data Group plc, said:
“This acquisition moves ID Data up the “value chain” from being a
plastic card and solutions provider into a broader financial services
company. The CredEcard business will allow us to develop opportunities
with existing European customers in retail, government, leisure and banking.
“As a card solutions company, we understand the pre paid market and its
participants to whom we have provided products and consultancy services.
Through this acquisition we will now be able to service many clients who
seek an end-to-end pre paid solution, not just with product, but with a
fully integrated financial, transaction and money transfer service.”
Peter Gregory, CEO of CredEcard plc said:
“The merger of our business with ID Data will allow us to fulfill our
ambitious plans and become a major force in the pre paid and associated
financial services businesses.
“We have demonstrated our advanced capabilities in the payroll sector
and have a pipeline of other exciting potential clients. Now we have a
stronger group offering a fully integrated solution which will be
delivering clients further advantages.
“We have been impressed with ID Data as a supplier and with their
dynamic approach to acquiring our business and providing us with
immediate new sales leads for our future growth.
“CredEcard has an attractive offering and combined with the
international credibility of ID Data will, I believe, deliver success
The pre paid card market is expected to grow rapidly over the next years
with MasterCard estimating that there will be 360 million pre paid cards
in Europe by 2010 with billions of Euros potentially being held in these
The pre paid card solution allows non banked and banked individuals to
enjoy the facilities of a card account through the use of the Visa or
The card can be used for receipt of travel money, salary and benefit
payments, through to insurance companies paying claims using the card.
Due to the relationship with Visa and MasterCard, the pre paid card can
be used globally for every day purchases and cash withdrawals.
The pre paid card business derives its revenues from program management
fees on behalf of client companies as well as running consumer facing
card issuance programs directly. Revenues come from the fees associated
with card holder registration, usage and funding.
The acquisition is a rational extension of ID Data’s strategy to become
a totally integrated solutions provider utilizing its solid and secure
MasterCard and Visa accredited platform established over the last seven
CredEcard invested heavily in creating an excellent capability, focused
on payroll solutions, but lacked size and funding scope. The decision to
merge the business into ID Data affords access to funds and enhanced
credibility through the provision of a total solution. ID Data can also
funnel all of its pre paid prospects through the CredEcard platform.
ID Data has previously stated its objective of increasing its “value
add” from the strong relationships it had with its clients, to include
transaction processing and financial services. The acquisition of
CredEcard is a positive move towards the provision of pre paid debit
cards directly to consumers and will advance the Company’s strategy.
ID Data’s combined pre paid business will use the CredEcard brand.
CredEcard will be run as an independent business unit within the ID Data
Group, so as to afford all the group businesses continued independence
of action when it comes to commercial strategy and client relationships.
CredEcard and ID Data’s combined capabilities will offer a competitive
alternative to existing schemes, with ID Data’s core business providing
the capability of producing, processing and personalising cards quickly,
giving increased process control, cost reduction and service advantages.
Under the agreed terms of the acquisition, which is subject to a number
of conditions, ID Data will issue 25,000,000 new ordinary shares to
CredEcard at 1p per share as an initial payment with further contingent
payments of up to GBP400,000 in new ordinary shares and GBP75,000 in cash
subject to achieving specified performance objectives over the next two
years. In the year ended 30 April 2006 CredEcard made an operating loss
of GBP351,167 on turnover of GBP567,347 and an operating loss of GBP571,170 on
turnover of GBP173,335 in the six months ended 31 October 2006. The book
value of the assets being acquired by ID Data pursuant to the
acquisition is estimated to be approximately GBP0.1 million.
ID Data intends to raise additional funds over the coming weeks to allow
for the rapid development of this new business activity.