Danka expands with pounds 109m Infotech buy

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The Independent Online
Danka Business Systems, the photo-copier company, continued its rapid expansion with the purchase of Infotech, one of Europe's largest independent copier and fax suppliers, for pounds 109m.

But yesterday's announcement included a warning that Danka would take a pre-tax charge of about pounds 6m in the third quarter due to restructuring of the company's expanded international operations. The shares fell 72p to 482p.

The Infotech purchase is Danka's largest to date and would firmly establish its operations across Europe, Dan Doyle, chief executive, said.

He expected the acquisition to be neutral to earnings in the third and fourth quarters, due to about pounds 2m in costs for training, advertising and development of a European head- quarters.

Infotech, which last year made revenues of pounds 180m and pre-tax profits of pounds 7.7m, markets a full range of Ricoh products. Under the deal, which if it is given regulatory approval will make the combined group one of the largest, Danka will pay pounds 109m cash funded through existing and additional bank credit facilities. At 30 September Danka had $172m available in existing credit facilities.

Danka yesterday reported a 28 per cent rise in interim pre-tax profits to pounds 27m, on turnover up 40 per cent to pounds 330m. Mr Doyle said margins remained strong despite the rapid pace of acquisitions.