Prism Holdings` electronic funds transfer and bill payment processing services business, Prism TranSwitch Services (PTSS), has been bought by technology group Altech for R47 million in cash.
The deal, subject to certain conditions, will become effective on 1 December.
PTSS switches over 150 million transactions a year on behalf of major retailers, utilities and financial institutions. It provides services to Pick `n Pay, Shoprite, Edcon, Eskom, Telkom and BP, among others.
The sale will provide a much-needed cash boost for Prism Holdings, which suffered a headline loss of R82 million in the year to June. Prism says the sale is part of a move to refocus on its core business of software and intellectual property.
Altech CEO Craig Venter says the acquisition will prove to be value-enhancing for the group, particularly Altech Card Solutions (ACS).
"We identified PTSS as a perfect strategic fit for ACS, as it should help to strengthen its customer base and provide for the additional development and extension of the value-added services that ACS already provides.
"Following this acquisition, we will be able to offer - through our various companies - card manufacture and personalisation solutions, card applications and terminal solutions, e-commerce, t-commerce and m-commerce, and now transaction switching through PTSS."
He says PTSS runs a robust and dependable system, and adding to its high degree of reliability is the fact that it has been designed to cater for rapidly rising transaction volumes and will also support new payment mechanisms as they evolve.
"The spin-off benefits for Altech will be tremendous. For example, Africard and Cardtronics will benefit through the businesses of PTSS, as they both effect payment transactions that are card-based. Also, those cards - debit and credit - can be supplied by Africard."
Prism CEO Alvin Els believes the sale will simultaneously resolve two key issues for the company.
"In the past, PTSS`s operations have conflicted with the needs of our products and solutions customers. There were times when they took issue with the fact that we were selling them products, while at the same time operating a service that was in conflict with their own.
"The sale of PTSS ends that conflict of interest and allows us to focus on our core business, which is development of software and intellectual property, while at the same time realising some much-needed cash for our organisation."
He says it takes a fair amount of money to keep an operation like PTSS going, and volumes need to be high. "Not only have we made a significant amount of money from the sale, which will help reduce gearing levels, but - thanks to the fact that the PTSS system uses a lot of our company`s technology - we have now created in Altech a strong and viable customer for our products and solutions."
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