Logica boosts financial side with Precision buy

Click to follow
LOGICA is adding to its portfolio of financial software with the acquisition of Precision Software, a US company specialising in commercial loan-processing programmes. The deal will cost dollars 3.3m (pounds 1.6m) in cash initially and up to another dollars 9m by mid-1998, depending on Precision's performance.

The financial sector has been one of the computer services group's fastest-growing areas of business. It accounted for 33 per cent of Logica's pounds 106.5m sales in the six months to 31 December, up from 29 per cent in the corresponding half of 1992.

Jim Yates, director of international operations, said: 'This market appears to be recovering. It is fairly buoyant.' He said further acquisitions to enhance the group's international finance product base were likely.

Precision, a private company founded in 1984, fills a gap in Logica's product range with its multi-currency wholesale loan syndication and administration packages. Logica's existing products consist of payments and settlements systems and retail banking software.

Citibank collaborated in the development of Precision's software and remains its most important customer. Mr Yates said the acquisition would bring Logica an attractive client base and it would be able to market additional computer services that Precision had been too small to offer.

The group's US operations made interim losses of pounds 700,000. Precision made pre-tax profits of dollars 900,000 (pounds 430,000) in the year to 31 December, on turnover of dollars 1.7m.

Tressan MacCarthy, an analyst at Panmure Gordon, said: 'The acquisition fits into Logica's strategy, and although the group is quite small in the US at least, it bought a product it can market to a wide customer base.'

Logica shares were unchanged at 303p.