Torex Retail has announced the completion of its sale to private investment firm, Cerberus European Investments.
The troubled retail software firm had been facing financial problems since the end of last year, when it issued a profit warning and suspended trading in its shares on 26 January.
Cerberus will purchase of all of the businesses and trading subsidiaries of Torex Retail for £204.4 million, in addition to which Torex has assumed associated subsidiary company liabilities, following talks the software maker had previously said were ongoing with an unnamed investor.
Torex said the transaction will enable it to consolidate, grow and reposition itself as the leading global independent supplier of retail software. It will also allow Torex to move beyond issues that have impacted the former holding company, which is not being acquired. Torex management will focus on solution development and business integration.
UK general Retail divisional managing director, Doug Hargrove told CIO that, since the company was put up for sale in January, it has been business as usual, while the management issues have been addressed. He added: “The new owner has a long-term commitment and operational expertise. There has never been a doubt about the quality of Torex’s product base or our commitment to our strong customer relationships and this change of ownership will enable us to genuinely integrate the businesses and build on our already leading market position.”
Some industry commentators have questioned the viability of Torex business in response to its highly acquisitive strategy, buying no less than 13 other vendors in the last four years. The UK Retail business alone includes KPOS, Alphameric Retail, Anker UK, Radii, XN Checkout and Retail-J.
Ironically, partner, Torex used to be a distributor for rival Austrialian healthcare firm, IBA in the UK before merging with equally troubled partner and key National Health Service IT supplier iSoft in 2003 (which is now being sold to IBA after all).
The Serious Fraud Office, Financial Services Authority and London Stock Exchange have all investigated a £23m debt posted by the company due to delays in delivering a number of point-of-sales contracts announced with retail customers.
Torex had said £23.1 million of contracts would be delayed into its next financial year, ending 31 December 2007. These include a £10-million deal with McDonald’s, £1.2 million with pub group Spirit and £800,000 with clothing retailer Matalan.
Torex Retail's portfolio spans high street and out-of-town retail as well as the petroleum and convenience sector and with over 6,000 customers, including Tesco, Argos, Vodafone, Harrods, Schlecker, LIDL, Edeka, Ann Taylor, Safeway, Stein Mart, Mitchells & Butlers, Somerfield and Waitrose. It has more than 2,600 staff based in 17 countries.