Service Point
Service Point Will Tap Shareholders to Finance Acquisitions
2010-11-05 08:00:29.25 GMT
By Manuel Baigorri and Paul Tobin
Nov. 5 (Bloomberg) -- Service Point Solutions SA, Spain’s only publicly traded document-management company, said it will finance acquisitions through share sales to current investors as it resumes takeovers after a two-year halt.
The company aims to make purchases in Germany and Scandinavia to increase revenue, Chairman Juan Jose Nieto said in a phone interview. The acquisitions will be financed through “very austere and very selective” rights offerings, he said.
“We’re talking about the short term,” Nieto said.
“Unless something negative happens, during the first quarter of
2011 we should be able to announce new growth through acquisitions.”
The company, based in Barcelona, halted takeovers to focus on reducing costs after buying 17 companies in the four years through 2008. Nieto said he’s “very satisfied” with the cost cuts achieved and the company is in a good position to resume acquisitions. Last year, Service Point posted its first annual loss since 2004 as demand fell for document-related services.
The market is still ‘very challenging,” Nieto said
Service Point, which operates in eight countries, is now ready to resume purchases of companies with as much as 15 million euros ($21.3 million) in sales in a “selective way” in order to grow, said Nieto.
“We won’t buy 17 companies again,” the executive added.
Service Point is “cautiously positive” about 2011 as sales are improving “in a prudent way,” Nieto said. The company announced last month that it had won new contracts valued at 24 million euros through its Dutch and U.K. units.
Net Income
Customers of infrastructure, architecture and engineering businesses, which represent about 33 percent of total revenue, are still “affected by relevant declines,” the executive said.
The company may post 2.1 million euros in net income for the full year, after last year’s 7 million euros loss, according to the average estimate of analysts in a Bloomberg survey. The company plans to resume dividend payments once it’s profitable again, Nieto said.
Service Point has dropped about 38 percent in Madrid trading this year before today, giving the company a market value of 71.4 million euros. The decline has been “very painful” and is an “excessive punishment,” Nieto said.