UK shop till group Torex Retail was today set to expand into the pub and restaurant sectors after unveiling a £73m (€109.1m) deal for a rival.
Torex, whose clients include retailers Tesco, Woolworths and Selfridges, said the acquisition of XN Checkout would add pub operators Mitchells & Butlers and Wolverhampton & Dudley to its customer list.
The move, which is being unanimously recommended by XN Checkout, marks a major windfall for chief executive Edwin Dayan who has a 29% stake in the firm he co-founded two decades ago.
Torex, which floated on the London stock market last year, has more than 2,000 customers and employs 1,000 staff in the the UK, continental Europe, South East Asia and the United States.
Its key area is retail, where it has a presence in out-of-town sites and the convenience sector as well as on the high street. Other clients include Argos and Shell. Its products range from tills to back office software.
It said the move boosted its chances of winning business from large multi-national hospitality, hotel and gaming chains.
XN Checkout’s software is used in nightclubs, ferries, catering firms and in shops. The firm floated on the Alternative Investment Market (AIM) last year and its strategy has been to expand further in hospitality, gaming and retail.
The firm believes its markets are set for strong growth as checkout systems bought in the late 1990s are now reaching the end of their life.
Torex chairman Rob Loosemore said: “This transaction will bring an additional dimension to Torex Retail, becoming a market leader in the rapidly growing complementary sectors of hospitality and gaming.”
The planned acquisition, which is subject to approval by shareholders, would lead to Mr Dayan becoming an executive director of Torex.
Torex posted pre-tax profits of £7.7m (€11.5m) on sales of £70m (€104.6m) last year, compared with XN Checkout’s profits of £1.7m (€2.5m) on sales of £18.3m (€27.3m). The deal is likely to have an effect on earnings per share within its first year.
Shares in both companies were around 3% lower today.