Five years ago: Psion adds up cost of failed Amstrad buy
Published: 07 Aug 2001 08:00 BST
Declaring its latest financial results, Psion said pre-tax profits would have been £8 million rather than £6.5 million, had it not been for the cost of a lengthy spell of due diligence, the legal process by which companies involved in acquisitions investigate the true worth of the purchase target.
"If you are going to investigate any situation on behalf of your shareholders it is appropriate not to use hick lawyers from Bognor Regis," Psion chairman David Potter told The Daily Telegraph yesterday. Among the blue-chip names involved in the proposed deal were BZW and Arthur Andersen.
Potter also declined to comment on reasons for the collapse of the Amstrad purchase but said that it would still confident of having wireless communications in its handheld systems by 1998, after boosting its research and design budget by almost half. An acquisition could accelerate the R&D process, he added. Amstrad's ownership of the DanCall digital comms subsidiary was seen as a key attraction of the purchase.
Generally, Psion still looks very healthy with revenues up 35 per cent to £53.7 million for the first six months of the year, aided by a 33 per cent hike in Series 3a sales. The Workabout line that is aimed at vertical markets added £4.3m, but Psion's Achilles heel remains apparent, with US sales contributing just £5.4 million.
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