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Gentrack buys into more European companies

NZ Newswire logoNZ Newswire 23/04/2017 Paul McBeth

Gentrack Group wants to double earnings from its airport software business by 2019 after buying controlling stakes in two European companies for some $19.8 million.

The utilties software developer will pay 41 million Danish krone, or $NZ8.4m, for 79.8 per cent of Denmark-based Blip Systems and 7.5m euro, or $NZ11.4m, for 75 per cent of Malta-based CA Plus, it said in a statement.

Both acquisitions have three-year earn-out agreements for the remaining stakes, and will be funded through Gentrack's debt facilities.

Blip develops software to measure passenger flows, queue prediction and capacity forecasting, with 26 airport customers, while CA Plus has developed software to manage, optimise and audit airport retail concession revenue, with six airport customers.

Gentrack said it expected the acquisitions would increase earnings before interest, tax, depreciation and amortisation to more than $5m in the year ending September 30, 2019, from $2.7m in the 2016 year.

"Blip and CA Plus both have multiple airport customers in common with (Gentrack's) Airport 20/20 and this has facilitated due diligence," company secretary Jon Kershaw said in a statement.

"Both solutions can now be integrated with Airport 20/20 to provide significant additional operational benefits and a unique product range for airport operators."

The deal comes less than a month after Gentrack spent $79m to buy Junifer Systems, the UK's provider of customer information and billing system provider for energy retailers.

Gentrack is due to report first-half earnings late next month and has said it expects sales to rise about 20 percent as it benefits from new projects coming on stream.

Blip and CA Plus will have a marginal contribution to Gentrack's earnings in 2017, with more meaningful input in the following years, it said.

The shares last traded at $4.38 and have gained 26 per cent so far this year.

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