Shareholders in both companies gave their backing to the merger as reported on  the Radio New Zealand website.  With 93% in favour at Cadmus and 99.98% from Provenco there is a strong mandate for change.  This is a very exciting time in the payment space and it should be made more so by this partnership.

There are still many merchants that have yet to upgrade. The banks have started sending out new letters to merchants and June 13th 2008 is now the cutoff date for merchants to upgrade to the new standards on the Paymark network.

As you are aware an industry-wide programme to prepare New Zealand for the introduction of EMV chip-cards is nearing completion. This programme involved the progressive retirement of older EFTPOS terminals from the ETSL (Paymark) network.

Support for EFTPOS terminals running ETSL(Paymark) software version between 4.5 and 5.0 inclusive has now stopped, although these terminals have yet to be disconnected to allow the remaining merchants a final opportunity to upgrade their terminal without any disruption to their business.

From 16 June 2008, ETSL (Paymark) will be taking steps to disconnect any remaining terminals using ETSL(Paymark) software version 4.5 through 5.0 inclusive from its network.

Now is the time to upgrade to avoid the rush, we have the best price guaranteed on the latest equipment including the Ingenico i5100, the Hypercom T4220 and the Verifone VX670. All these products will upgrade to version six and will connect through a business broadband connection.

Yesterday chairman of the merger establishment board and Provenco Rick Christie announced the appointment of Auckland businessman Jim Doyle as CEO - designate of the proposed merged companies of Provenco Group (PVO) and Cadmus Technology (CTL).   Mr. Doyle will take up the role of CEO effective from the merger date of May 8, assuming shareholder approval for the merger proposals is received. Read more here.

Shareholders of both companies will vote on the merger proposal at special meetings on Wednesday April 23.  This will be an interesting vote. There is plenty of reading in the various papers that have been released.  The major points being the difference in debt and business structure . With Provenco’s debt to equity ratio almost 65% Cadmus shareholders are getting alot of debt for their shares.  It was noted in the Grant Samuel report that Provenco have breached their banking covenants twice this year and they require the capital raising to reduce this debt.

There is also more investment required in the retail automation division on which resides the hope for international deals and as mentioned in the report is subject to uncertainty surrounding the eventuation and timing of the resultant revenues.

This is a very interesting market both in terms of eftpos where we concentrate and retail automation.  There are large players (Card Schemes, Banks,  Oil Companies)  and plenty of national and international opportunity and if My Doyle and co get it right then look out.

We enjoyed the St Theresa’s gala over the weekend, nothing like some home cooked cakes to set the weekend off on the right tone.  We provided the eftpos for the function and ended up with a very good banana cake which all the staff appreciated.  Thanks for the note and we were happy to help

St Theresaâ??s Letter

The proposed Provenco-Cadmus merger is proposed to become effective in early May, with shareholder meetings to be held on 23 April, according to Provenco chairman Rick Christie and Cadmus chairman Peter Maire. The ratio is remaining the same so you get 4.2 Cadmus shares for every Provenco share, so from the close yesterday CTL 9 cents and PVO 32 cents you get Cadmus Shares at 7.62 cents.

“Mr. Christie said the synergies are conservatively quantified at $7.6m p.a., but the board was confident this should increase over time.”

That saving would cover the losses from both companies so that is a very good place to start. Read more here.