In March, Spicer Holdings announced that it would sell off "some" of its assets to reduce the interest-bearing debt that was crippling the company. By July "some" had become all of its local assets, while it focused exclusively on divisions in Sweden and the UK, and by September Spicer effectively had no local presence.
Spicer Specialised Services, a division that had been the pride and joy of the group, was in July quietly snapped up by Fintech subsidiary National Data Systems (NDS), which describes the unit as the most worthwhile part of once high-flying Spicer.
"Specialised Services was the crown jewel and really the one funding the rest of the organisation," says NDS MD Jack Horton. NDS wasn`t the only suitor to realise the division`s value, he says, and the bidding was won precisely because Spicer was in dire need of money.
"We obtained it because we had money in the bank while others were talking stock."
The price of the acquisition was not disclosed.
Christine Webb, director of business development for Specialised Services, admits there was bitterness when the parent company sold off its brightest child.
"We were a little hurt on the disposal," she says. "We never use the name 'Spicer` anymore, and we haven`t for some time." The division is now known as NDS Specialised Services.
Webb says Specialised Services was profitable throughout, but its achievements went unnoticed after "gross mismanagement" at MIS-Corporate Defence Solutions and losses by other local divisions created a profit black hole.
Things became tougher as Spicer`s woes increased. "Things got tough, very tough," says Webb. "We had no instant access to cash and client retention was difficult."
The NDS acquisition changed Specialised Services` working environment. "NDS welcomed us with a lot of warmth and with none of the conflict you so often see in mergers and acquisitions."
NDS sees the acquisition as a move into more dangerous but also more rewarding business. As the representative of the automatic teller machine (ATM) company NCR, NDS claims more than 80% of the local ATM market and more than 60% of the cheque processing market. Horton says such a protected environment meant higher margins, but less opportunity.
"We realised we had to get into the service area," he says. "A lot of people use the term 'solution`, but nine times out of ten a solution is tied up to a box. We want to get away from that where we can."
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