Posiflex Technology Inc (振樺電子), a Taiwan-based point-of-sale (POS) terminal brand, has agreed to acquire US maker KIOSK Information Systems Inc, the largest self-service solution provider in North America.
Under the acquisition agreement, Posiflex is to pay US$105 million in cash to acquire KIOSK — the largest acquisition deal in the industrial computer sector in Taiwan.
Posiflex’s board of directors has approved the acquisition.
Analysts said by purchasing a company as large as KIOSK, Posiflex has demonstrated its ambitious expansion plans.
The scale of the deal is almost five times the Taiwanese suitor’s paid-in capital. According to Taiwan Stock Exchange data, Posiflex is capitalized at NT$676 million (US$21.53 million).
Commenting on the acquisition, Posiflex said that KIOSK is the third-largest self-service solution provider in the world.
The US firm’s clients come from a wide range of industries, such as telecom services, retail, logistics and financial services, Posiflex said.
Among the prominent clients of KIOSK are AT&T Inc, IKEA, PepsiCo, McDonald’s Corp and the US Postal Service, Posiflex added.
Posiflex said that the acquisition agreement was reached because KOISK’s major shareholder, a private equity fund,wanted to dispose of the US firm for profit.
Through the acquisition, Posiflex said that it expects to enter the self-service business by taking advantage of KIOSK’s leading position in point-of-sale terminal technology.
In the past three years, KOISK posted a compound annual growth rate of more than 30 percent, and has enjoyed a gross margin of between 35 percent and 40 percent, Posiflex said.
In the first seven months of this year, KOISK’s earnings before interest, taxes, depreciation and amortization were more than US$7 million, Posiflex added.
Analysts said that after the acquisition, Posiflex would see its revenue next year double from this year.
In the first seven months of this year, Posiflex posted NT$1.78 billion in consolidated sales, up 6.18 percent from the same period last year.
“By combining Posiflex and KIOSK’s dual-value proposition in this domain, we are confident of emerging as the leader in this growing market,” Posiflex chief executive officer Owen Chen (陳茂強) said in a statement.
Posiflex said that it would use its own fundsto pay for 20 percent of the acquisition price, and it would seek bank loans to pay for the remaining amount.
The company said that it could issue new shares and convertible bonds to repay its bank loans in the future.
After the acquisition completes, KIOSK chief executive officer Tom Weaver is to be on the board of directors for both Posiflex and KIOSK.
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