Spectra Systems Corporation Acquisition of all assets from ESI Integrity Inc
Spectra Systems Corporation, a leader in machine-readable high speed banknote authentication, today announces that on 6 June 2012, it acquired, with effect from 1 June, all of the assets of the ESI Business, including importantly its proprietary source codes, multi-year contracts (currently in the process of re-assignment to Spectra), and long-standing customer relationships. The consideration for the assets is $1.425M in cash payable upon completion.
The ESI Business, which is headquartered in Vancouver, Canada, is a leader in the gaming software industry and has a 22% worldwide market share of the secure Internal Control Systems (ICS) segment primarily with international lotteries, including Norway, Greece, South Africa, Russia, and Korea.
ICS is a secure, high speed data platform which plays a critical independent security role in auditing online and many other gaming systems. ICS provides tools for fraud detection, money laundering, match fixing, and statistical analysis and has many existing parallel applications used by the securities exchange industry. The ESI Business ICS contracts are multi-year and its independent services are used to verify the accuracy of transactions logged by providers of lottery services worldwide, including GTECH, Scientific Games and Intralot.
The ESI Business had $1.5M in revenue for the year ended February 29, 2012 with pretax net income of $0.21M and assets of $1M.
Commenting, Nabil Lawandy, CEO of Spectra Systems Corporation, said:
"The expansion of Spectra's secure transactions products beyond physical banknotes to secure software products for gaming will allow us to utilize our blue-chip credentials with central banks to gain market share for the ICS and other software development throughout the gaming world. The Board considers this to be an exciting acquisition for Spectra which will make a significant contribution to our future profits, both directly and through the elimination of duplicated costs.
In addition, we believe that we will be able to exploit our decade long relationships with central banks to offer our existing customers new software based products providing real time analysis of banknote and other transaction data aimed at increased visibility leading to higher efficiencies and cost savings."