The acquisitive software and services group is part-financing the deal through a four-for-13 rights issue at 123p a share to raise pounds 50.9m. The company said the remaining funds would come from existing resources.
The move represents a significant shift for ACT towards financial software packages. Though off the peg, these are specialist products that can easily cost up to pounds 250,000 each. They represent a faster growing and more lucrative business than the other areas in which ACT is involved, such as the provision of local government and medical software solutions.
At present financial packages make up about half the group's pounds 153m-a- year turnover. But analysts said that after disposing of BIS's peripheral activities, such as its Brann direct marketing business, the proportion would rise to about 70 per cent of ACT's pounds 200m-plus enlarged sales.
Roger Foster, ACT chairman, said as well as giving the group a wider product base, the acquisition would give it a much greater international presence.
'More and more banks want communication systems which operate on a worldwide basis. So we were very keen to operate internationally. This will give us critical mass.'
About 85 per cent of sales of BIS's financial and banking software are made overseas, compared with under a third of ACT's.
BIS, which operates in Europe, the US and the Far East, made pre-tax profits of pounds 7.6m on turnover of pounds 105.4m in the year to end-December.
Of this, about pounds 45m came from sales by its banking systems division, which specialises in Midas software designed to enable large corporations to move large sums of money around the world with ease. It has about 500 customers for its systems, which are sold through around 17 offices in 70 countries.
A similar proportion of sales were generated by its London-based information systems division, which provides financial organisations and local government with consultancy, software solutions and training services. The remaining turnover came from its Brann Direct Marketing arm.
ACT, which earned profits of pounds 20.5m last year, said that about pounds 25m of the purchase price would be deferred and become payable in two equal tranches six and 12 months after completion. ACT's shares ended 2p lower at 153p.
Nynex bought BIS for pounds 75m in 1989, but the attempt to diversify did not prove a success and it has more recently promised shareholders a return to core activities such as telephone services and cable television.Reuse content